The whole world is scared because of the spread of the coronavirus. As there is restricted movement of goods or people from one place to another, there has been a huge effect on people all over the world as well as the various business entities. The people are not able to go to work or are working from home. In many places, the government is putting lockdown either complete lockdown or partial, which has had a huge effect on business.
The business entities in the Middle East have also been hugely affected. Many of the global events had to be canceled due to the fear of the virus, and also, the countries were in lockdown, meaning that the people were unable to go to work, which has brought the world economy to a standstill.
Let’s have a look at the five major sectors which were affected in a big way due to Covid-19.
Major Business Sectors Affected
There were many businesses which were affected, but the most affected business sectors in the United Arab Emirates are:
1.Travel and Tourism Sector
In recent years, the government of the United Arab Emirates is trying hard to shift its focus from the Petroleum and oil sectors. UAE has a rich cultural history, and travel is a major revenue source. UAE is well connected with all parts of the world, but due to the spread of the virus, all the incoming and the outgoing traffic had to be stopped. This was a major cause of the decline in travel in the UAE.
Also, major events such as the world expo, which was to be held in Dubai in 2020, had to be postponed. As this was a global event, speculation was that it would provide a huge boost to the travel and tourism sector in the country. There was a huge expansion drive in the tourism sector as the country was getting ready for the increase in the number of footfalls in the country. But this didn’t happen due to the spread of the virus.
Many new hotels were built, and the existing hotels were expanding as there was a huge number of tourists coming in the near future. A number of amusement parks, shopping malls, etc. were being built, which would have had a hugely positive effect on the hospitality sector of the country. The drastic reduction in the movement of people from one place to another has affected this sector in a big way. The people are also reluctant to travel internationally.
Huge pressure on the healthcare sector has emerged due to the spread of the Corona Virus. More and more people are going to the hospitals to get themselves checked. This means that the hospitals not only have to handle normal patients but also have to take care of a huge number of people who are coming to get checked up.
4.Oil and Petroleum Sector
The outbreak of the virus has resulted in fewer people working in the oil field, which had decreased the production to a great extent. Over this, there was an oil price war with Russia, which brought the prices per barrel in the global markets even lower. At a point in time, the prices of crude oil in the global markets were as low as 1$ per barrel.
Even with such a low price of oil, the demand for petroleum products was very less as strict lockdowns were implemented. Over time these regulations have been eased, but still, there is a fear among people related to the virus due to which the people are reluctant to move out.
- Manufacturing Sector
The manufacturing sector has also taken a toll as there is a huge drop in the demand for manufactured goods. As the lockdowns have been eased, the demand is slowly rising, but still, the gap which has been created will take a lot of time to cover up.
These sectors are trying to recover from the blow given to them by the virus, and we hope that these sectors are stable once again in the near future. The pandemic has generated a lot of problems for businesses, but many business opportunities have also arisen, such as opportunities in the healthcare sector, e-commerce, etc.
A business should be always prepared for the upcoming possible threats and also adapt accordingly. If your business requires assistance in getting ready to tackle the present scenario, then JAXA Chartered Accountants can help your business. The experts at JAXA will help devise a viable business plan which will help you to take gear up for the present challenges and also take full advantage of the opportunities in the business environment.
If you want to know more about how your business can be more prepared and how JAXA can help you, then Contact Us. We will provide you with assistance in all the financial matters of the business.