Covid-19 Executive Briefing
Understanding the economic impact of the Covid-19 pandemic and the implications for the packaging sector
- ECONOMIC IMPACT -
Latest update: 23 June 2020
Many economists have cut their GDP forecasts. The 2020 consensus forecast for GDP growth is currently -2.6%.
The World Economic Forum believes that de-globalization will occur post-Covid-19. World trade is expected to contract between 13-32% in 2020.
Fitch revised its 2020 forecast for world economic growth to -4.6%. Its forecast for emerging economies fell to -4.5%.
Global economic output will fall by $8.5tn over the next 2 years, according to the UN’s World Economic Situation and Prospects report.
Impact of Covid-19 on asset prices
- SECTOR IMPACT: packaging -
Latest update: 17 June 2020
Packaging market impact
As food consumption shifts away from the foodservice sector, the demand for flexible packaging is set to rise in the short term. According to Wood McKenzie, the demand will increase between 5-10%.
Alcoholic beverages are declining, which will negatively impact the demand for glass packaging. However, as the focus shifts back towards sustainable packaging, glass will begin to pick up.
Stora Enso Oyj reported a 46% drop in first-quarter profit.
Covid-19 could change longer-term consumer behavior; the most successful companies will alter their strategies to accommodate this.
E-commerce packaging providers are scaling up production and benefitting from the increased demand for online retail. Leading packaging company, DS Smith, has launched an ecommerce range to address the demand from companies moving online.
Businesses will adopt strict safety measures upon reopening, which will heighten demand for products to help maintain hygiene standards. Graphic Image Films launched a new laminated film with additional protection, featuring anti-bacterial properties for use in food and drink menus, brochures.