What will impact the recovery of vulnerable industries & jobs?
As countries look to a recovery Post-COVID, two fundamental factors will play an important role, according to Horizon-Group insights: their exposure to industries likely to continue to operate at reduced output and hence employment levels and the strength of their labour markets and policies.
Among the countries heading the COVID Economic Recovery Index ranking, many score relatively poorly for their dependence on vulnerable industries, including the Netherlands, the US, the UK, and Singapore, who is 119th.
Like countries, industries have been affected in different ways by the crisis; by a collapse in demand; closure or operating restrictions due to containment measures; the impact of global travel bans; and supply chain difficulties.
Equally industries may not be able to return to pre-crisis levels of activity soon if no treatment or vaccine are found. Different industries are likely to return to pre-crisis activity levels at differing speeds but for some sectors the shape of that activity may change radically.
In some countries 50 percent or more of jobs are in sectors at risk.
Over 40 million jobs are at risk in Retail, Accommodation and Food, Manufacturing, and Construction in Europe alone (McKinsey, 2020). These industries are also those with a large percentage of lower-skilled, lower-income employees. Without wide-spread, rapid re-skilling, and training, many of those people may find it difficult to change jobs or enter new industries.
To date governments in many economies — notably in Europe — are still maintaining or only just beginning to scale back furlough or job retention measures, meaning the full impact of the crisis on job numbers has yet to be realised. But as businesses re-open, evidence suggests that so-called zombie jobs (Allianz Research, 2020), those in the sectors likely to be slowest to recover, will disappear.
Countries scoring higher on factors such labour market agility, the digital economy and skills and education will be better positioned to manage the labour market challenges ahead.