Given the overwhelming response to the view I sent out in an ‘internal’ Elixirr Team video (posted on LinkedIn and also included in our Elixirr Quarterly), we decided to provide a business view of how this pandemic has been unfolding. Our commentaries and data can be found on this page.
From 28 March to 5 July, we provided daily updates with a commitment to sticking to the facts without the rhetoric of misinformation. Our COVID-19 data incorporates a Weighted Moving Average (WMA) as a measure of the rate of change. The calculations of the measure are explained at the bottom of this article.
We’ve also undertaken case forecasts as part of the pandemic updates. More information regarding our forecasting approach can be found at the bottom of this article, after the weighted moving average explanation.
Interactive COVID-19 forecasting & business planning tool
The race for a vaccine?
Lockdown, social distancing and travel restrictions are having major implications on the economy and peoples well-being which will arguably have a longer term negative impact on society than the actual virus itself. Therefore it is imperative that when a vaccine becomes available, global leaders must ensure that it is distributed in a manner that enables a return to normality for all. Not just the fortunate few.
Governments are working closely with the leading academic institutions and pharmaceutical firms to ensure a viable vaccination can be developed and distributed on mass at the earliest possible opportunity. Clinical trials are being fast tracked and starting to reach the later stages of receiving regulatory body approval.
As soon as a viable vaccine is available, global demand will overwhelm initially limited supply. This prompts the challenge of how to effectively distribute the vaccine. Based on similar viral outbreaks like swine flu, history shows that wealthier nations will buy up the global supply of vaccines leaving the virus to continue devastating poorer nations. It looks like history will repeat itself with the US and Europe already placing advanced orders for hundreds of millions of doses of successful vaccines, potentially leaving little for poorer parts of the world.
However, unlike previous viral outbreaks, this is truly a global challenge that requires a unified effort that could be best addressed by pursuing a distribution strategy based on healthcare needs rather than the ability to pay the price for vaccinations.
The WHO are trying to orchestrate a global vaccination response. The mechanism, known as COVAX (COVID-19 Vaccines Global Access), aims to ensure the equitable global distribution of 2bn doses of effective vaccines by the end of 2021. Under the current plan, wealthy countries fund the purchase of vaccines from the facility, while 92 so-called “funded” countries receive financial assistance. COVAX is led by the UN-backed vaccine alliance GAVI, the Coalition for Epidemic Preparedness Innovations (CEPI) and the WHO. The initiative which was launched in June has failed to build momentum, amid rising fears of “vaccine nationalism”. It is perhaps unsurprising that Governments are prioritizing the welfare of their nations’ citizens. That is after all, their role.
Two approaches are available for Governments to adopt; ‘go-it-alone’ or participate in the COVAX alliance which could be seen as an insurance policy to the bilateral vaccine deals already made. The long-term implications of their chosen approach will heavily affect the global economy, political relations and potentially jeopardise the economic opportunities in emerging economies.
As informed citizens, how would you want your government to act.
If the strategy is working, is now the time to extend it?
Two weeks ago headlines reacted to the introduction of what is the new strategy for the UK government. Close monitoring of case related data (using weekly cases per 100k) to determine for that week, whether those arriving from certain countries should be subject to self-isolation for 14 days on arrival into the UK. If a country has an air-bridge the 14 day self-isolation is not required. The ‘threshold’ for countries where travellers need to self-isolate is set around 20 i.e. if 20 or more people out of every 100,000 in a country are infected over seven days then you will need to self-isolate for 14 days on return. This means that countries are added to and removed from the list on an ongoing weekly basis.
Portugal, where self-isolation is not required at time of writing (currently weekly cases are 19 per 100k) has seen the number of tourists increase in the last week. If it crosses 20 cases per 100k, travellers in the country will need to self-isolate on return. In Croatia, the full success of the measure has yet to be seen but it will be a good test of the strategy: weekly cases are still increasing but the R0 proxy which was at 2.12 is down at 1.16. We should see the weekly cases per 100k fall accordingly in the coming days.
This stop and start method is a little clunky, and no doubt frustrating for tourists and destinations alike. It could however provide a critical lifeline for those countries via tourism and in a world where we need to find solutions, seems to be working – albeit with a material in between the decision being made and the case data responding accordingly.
Is it time to start deploying a similar strategy to states and cities with the US? A country which has been all but off limits to those in the UK for several months now. New York, at one point the epicentre of the crisis, has an R0 proxy value of 1.06 and there are 19 weekly cases per 100k.
New York represents not only a key destination for business but also for tourists, especially as we move into the Christmas holiday season. As the search for a vaccine continues, now is the time to extend the strategies in place which are proven.
Playing sport to empty stands.
This year’s Olympic Games in Tokyo were postponed by a year, Wimbledon was cancelled for the first time since World War Two and a number of other momentous sporting fixtures which were due to take place in mid-2020 have been impacted.
However, as workers have started returning to offices, professional athletes, at long last, have been returning to stadiums. The Champions League final took place on Sunday 23 August seeing Bayern Munich come out on top, James Anderson became the first bowler to reach 600 test cricket wickets in their recent test match against Pakistan and Louis Hamilton recently took victory at the Spanish GP. The rekindling of sporting events is energising and positive, yet we are only realising a fraction of the benefit.
The aforementioned sporting fixtures (and many others) were hosted in empty stadiums, with no physical attendance of fans (and far fewer support staff!). For the vast majority of people, sport has a great influence on general well-being and mental health. A fan watching his/her favourite team or professional athlete offers some semblance of normalcy during these times and stimulates a sense of connection to a greater community. These are positive attributes that are only heightened when in the stadium with fellow supporters to celebrate a victory and lament a defeat. For the sake of the fans, and of course the athletes, stadium seats need to be warmed by supporters again.
There is a significant financial impact with reduced sport and stadium attendance too. EY’s annual survey of the Premier League estimates that the league produces around £7bn of GDP. When you consider global sport, it becomes clear that financial benefits linked to sport are immense. Empty stadiums won’t eliminate all the financial benefits of organized sporting events, but they will certainly reduce them and jointly impact fans’ mental health and well-being along the way.
That’s not to say that sports stadiums should be opened without caution. The world continues to gain a better understanding of the coronavirus every day, we have access to phenomenal technologies and solutions are being built to work around the limitations that coronavirus presents and keep people safe. Robots are disinfecting spaces with ultra-violet light, monitoring social distancing, checking thermal temperatures of pedestrians and ensuring sufficient hand cleaning. The internet of things (IOT) has also enabled sensors (attached to a belt) to automate check-in/check-out processes for onsite workers and sound an alert when two workers are too close together. And digital health passports leveraging blockchain technology are undergoing Beta stage testing.
Athletes are lacing up their boots as entrepreneurs are working on their games – the return of fans to stadiums does not have to rely on a vaccine.
The numbers stepping away from Europe.
Reading about some of the recent outbreaks across Europe, namely Croatia and France, it is easy to do two things. To decry there is chaos and to lose focus on the wider picture. Regarding chaos, yes some of the travel decisions may have caused chaos for some holiday makers but that is quite different to the decisions themselves being chaotic. Secondly the narrative of the global pandemic is very different to how it was in April, especially as it relates to Europe.
Writing now at the end of August, the top six countries with the most COVID-19 cases are: USA (5.89m), Brazil (3.6m), India (3.2m), Russia (0.96m), South Africa (0.61m) and Peru (0.59m). Collectively, these 6 countries account for more than 62% of global cases and 50% of global COVID deaths. Analysing the weekly cases per 100k of population for the top countries: USA (78 new weekly cases per 100k), Brazil (108), India (28), Russia (19), South Africa (33) and Peru (152).
In stark contrast, the total case numbers for the European countries referenced here last week were: Croatia (0.0081m), Greece (0.0086m) and Turkey (0.26m) and weekly cases per 100k: Croatia (31), Greece (12) and Turkey (9).
The actions being taken across Europe are critical and are a demonstration of painful lessons being learned (and moreover, being learned from other countries mistakes). It is allowing adults to return to work, children to return to schools and disposal income flows to return to businesses domestically and overseas.
In those top six countries, especially those which fall in the top 6 for absolute cases and weekly cases per 100k (such as the US and Brazil), respective governments and world organisations need to be taking more action. Those actions extend to not only working on a vaccine but by adopting a more dynamic and data driven approach to decision making.
As consumer savings grow, how will people spend their money?
In times of uncertainty, it is human nature to worry about the worst-case scenario and all the ‘what ifs’ that could play out in any one person’s life.
The pandemic has led households to review financial outgoings in drastic fashion. The German insurer Allianz forecasts that by the end of 2020 European consumers will still have €400bn of extra savings with UK consumer spending plunging by 37% in April (YoY). The primary drivers of this drop being people working from home and the closure of pubs, bars, and non-essential shops.
Bolstering household finances is key to sustaining consumer confidence despite decreasing job security and rising pessimism around the UK economy. However, spending has not totally dried up. Supermarkets, digital content and subscriptions, bicycle equipment, the DIY sector and home office suppliers are amongst the big winners during lockdown and this prolonged work from home regime.
The future of consumer spending habits is unclear however several market commentators have made their predictions. The British Retail Consortium (BRC) commented that coronavirus seems to have accelerated many trends and spending habits seen prior to the pandemic. The move to online purchasing is likely to become entrenched after a sustained period of lockdown. Visa’s European CEO, Charlotte Hogg, has forecasted a permanent shift in consumer spending habits having seen a clear uptick in VISA transactions demonstrating a move away from cash transactions.
What this means for consumer facing businesses is the need to adapt and follow consumers into the new spending channels. The ability to successfully pivot will be a key factor for any business to maintain and grow revenue. As the consumer landscape continues to adjust to keep people safe and healthy, it is clear that businesses need to focus on the consumer more than ever.
The cases for tourism
Since the outbreak of COVID-19 there have been a variety of methods and data points used to calculate and gauge the severity of the situation. Whether that be new case rates, deaths:cases, infection rates, transmission rates via R0, or most recently (and actually the first data point used here) cases per 100k of population. All of which can be seen in our dashboard.
In some cases data points were selected based on their level of alarm but for the most part it was in an effort to find the metric that would give the fairest reflection of the spread of the disease and the relative level of safety.
As non-essential travel was allowed, tourists (and their crucial spending power!) have started to return, largely on short-haul flights. Even with the improved safety measures in place on flights it is clear that this travel has created an increase in cases in some of the most popular destinations open to Brits. Croatia, Greece and Turkey were relatively unscathed by the first wave of the pandemic. A combination of swift lockdowns and they are countries where internal domestic travel is less common.
Looking at Croatia’s case statistics, the total cases remains very low (<7,000) and whilst the cases per 100k of population have increased in the last week it also remains low (as an absolute….see below for the more concerning dynamic view). For death rate statistics, Croatia has been very low compared to the rest of Europe; 40 cases per death compared to 8.4 for France and 7.1 for the UK. This shouldn’t be surprising, as the Croatian diet and lifestyle will mean relatively few have pre-existing conditions which make them high risk.
However, whilst the total cases and death rates are low the data points relating to speed of transmission are showing an increase. The cases per 100k of population on a weekly basis is now 21 in Croatia, higher than the figure for Sweden of 17 where self-isolation controls are in place and significantly higher than the UK’s 10. Similarly the R0 factor, not talked about much recently but still critical, is showing at around 1.89 for Croatia (remember that the target the UK were striving for in June 2020 was to keep the R0 under 1.0, but which now stands at 1.16).
There is a hard decision which has to be made; whether to restrict travel to countries like Croatia (either directly or through quarantining on return). This decision not only impacts livelihoods in the UK, but livelihoods across Europe: tourism accounts for 30% of GDP in Greece and 17% in Croatia.
Watching the data closely is critical as if it continues to increases in the dynamic statistics we will soon see decisive action from the UK government.
Do school buses have a slow puncture?
Education is a key enabler to prosperity, success and ultimately a better future. The UNESCO Institute for Statistical Data reported a peak of 1.6 billion learners that were affected as a result of COVID-19 in April 2020. Nearly four months on, we would expect that the total affected learners around the world would have dropped significantly. Yet the data is telling us otherwise.
At the beginning of August, it was recorded that 60.5% of the world’s learners were still being affected by COVID-19. This includes as many as 100 countries that are yet to announce a date for schools to reopen. The UN Secretary-General Antonio Guterres recently warned that the pandemic has created the most severe disruption in the world’s educational systems in history and could wipe out decades of educational progress. Quick action is required and the “Education in the time of COVID-19 and beyond” Policy Brief launched by the UN sets out recommendations in four areas to mitigate the effects of the pandemic:
- Suppress transmission of the virus and plan thoroughly for school reopening
- Protect education financing and coordinate for impact
- Strengthen the resilience of education systems for equitable and sustainable development
- Reimagine education and accelerate positive change in teaching and learning
With the help of the UN’s Policy Brief and research supporting that <5% of COVID-19 cases for those aged 18 and under (in the EU & UK), we should witness a more rapid recovery for the global learners that have been affected. Especially those at pre-school, primary school and secondary school. However, progress has been frustratingly slow. No doubt returning to school requires a vast amount of preparation, planning, strategy and innovation to ensure the safety of students, teachers and other staff members. Making public apologies about the delayed reopening of schools is does little in the way of taking action to mitigate the long-term impact on the students themselves.
The first step is to take one. A current case study is Scotland – a country that’s recently made progress by reopening some schools. Pupils in Scotland are returning to class for the first time in nearly five months and the Scottish government is hoping that all schools will be fully open by 18 August. We need more countries to take these bold steps for the sake of future generations.
Scottish pupils are returning to school and they could provide a suitable model for other first world countries to adapt for themselves. However, it’s these first world pupils that have easier access to laptops, electricity, internet connections and educational materials that enable remote learning. Some 1 billion people in the world still lack reliable access to electricity. It’s highly unlikely that these 1 billion people will have their own PC or smart phone and a reliable internet connection. Physical reading materials will certainly help, but there are 773 million youth and adults globally that lack basic literacy and numeracy. The solutions need to be bigger and bolder and the Policy Brief recently launched by the UN encompasses all learners with the aim of getting the “school bus” back in business.
Adapting in the face of adversity
Throughout the different phases of COVID-19 we have been pleased to observe many businesses transform and pivot accordingly – and Elixirr has been no different. We’ve focused on this mentality for our clients – not only helping them to rapidly adjust to the short and long-term impact of the pandemic, but actually thrive in the face of disruption. Despite the positive stance of many businesses during this period, acclimatising to a new environment has undoubtedly brought with it some hurdles to face.
In May the London Stock Exchange reported the following: “The markets have experienced significant volatility, showing a steepest-ever fall of 30% from peak to trough in the FTSE 100 and FTSE 250. In the week that followed the UK lockdown there were 2.9m trades on London Stock Exchange in a single day – the highest number ever recorded in a single day.”
Sadly, a decline has been somewhat unavoidable for certain businesses during this period, but for others it has provided a chance to put a best foot forward – particularly for smaller firms who are able to adapt quickly.
At the beginning of the year we decided to take Elixirr public, and began the formal IPO process at the end of March – coincidently in exactly the period in which the UK began lockdown. We eventually listed Elixirr on the AIM market of the London Stock Exchange on July 9th. Some were fascinated that we had persisted with this strategy given what had started to unfold – we have been one of the few companies to take the leap so far in 2020.
The pace and vigour in which the team were able complete the intense process was largely helped by a new working environment;
- Efficiency – what would normally have been hundreds of ‘face to face’ meetings became virtual, meaning we avoided contending for premium f2f time with senior team members diaries – many of whom would usually be working across locations and even in different time zones.
- Focus – by running a highly efficient process, our senior team were able to concentrate on the day to day running of the business – while still being involved in key decisions. Less time spent commuting, social events and networking meant a real sense of focus, and extra hours open in the day to spend on the all-important output.
- Delivery – we allocated an internal consulting team solely on the IPO, working with external advisors. This meant we ran the process like we would a project, with a tight structure, and monitoring of our daily progress we simply conducted this remotely – with the same seamless transition as our core consulting work.
This is an interesting case study in the argument for firms to be bold and to pioneer the way, rather than shy behind the crisis. Boris Johnson said in June,“If covid was a lightning flash, we’re about to have the thunderclap of the economic consequences. We’re going to be ready.” Government support has been critical, but now is not a time to rely on hand-outs, the economy and future of this country is reliant on businesses taking responsibility and stepping up.
Although not planned in this way, we took advantage of the unusual working environment that COVID-19 thrust upon us, and completed an IPO process between April and July – less than 2 months less than it commonly takes.
This is a message to businesses leaders; it’s always advantageous to adapt – even if it means rewriting the rules. After all, unprecedented times require extraordinary actions.
100 days of data
For 100 days, we’ve been committed to sharing logical, data-based views on events related to COVID-19. Our focus has always been to cut through the sensational, populist “noise” and provide insightful views driven by data. Views that helped companies anticipate regional COVID-19 peaks, the lifting of lockdown and the impact to businesses and people. More recently we’ve been analysing the impacts and effects on economies, markets, the environment, communities, health systems, education and future generations (to name a few).
So, what have we learned?
Through the uncertainty that’s existed in the last 5-7 months, we focussed on data and have managed to stay grounded in facts. We’ve endeavoured to stay clear of the populist and sensational noise that floods news headlines, instilling unnecessary fear.
Our data was not perfect, but some data is better than no data.
When we developed COVID-19 forecasts for peak case rates in April, our predictions were, at most, 2 days off the actual day of peak cases. Granted, our forecasts evolved as we collected more data to improve our understanding of the virus, but we still provided a data-based view to help people and businesses prepare and plan accordingly. At the time, many governments were not providing any clarity or transparency for their people. Our forecasts were shedding light on a vital topic that governments were avoiding.
Success is driven by those that are most adaptable to change.
Businesses that are prepared to change, have agile mechanisms, show resilience and accept that hard decisions need to be made quickly to maintain operations, are the ones that have thrived. These characteristics are imperative for success in the rapidly changing industries around the world – even in the absence of a global pandemic.
Big data has had a negative stigma attached to it – this could be the turning point.
People have seen the practical ways that big data can help global issues. Google’s mobility reports are helping identify changes in community movement, which proves useful in identifying the performance of lockdown measures. Furthermore, the mobility data exposes how communities and industries are impacted to varying degrees by lockdown policies – a vital analysis in combatting inequalities.
We can drastically reduce carbon emissions if we really want to (or have to!).
Citizens’ experience of cleaner air during lockdown and the “build back better” campaign will apply immense pressure on governments to play a significant role in the creation of sustainable and environmental policies going forward. This will require short-term flexibility of consumer expectation.
Working from home (WFH) is here to stay, in moderation.
For most industries, WFH works. In some cases, it works very well, improving efficiency and productivity. It comes at a cost however. The economy surrounding commuting (travel, hospitality, infrastructure) suffers and so too did the mental well-being of workers. Going forwards, a balance will be struck between working from home and working from the office.
At a time when rhetoric abounds, this undertaking was about analysing data and sharing views. It allowed us to not only challenge rhetoric, but to flex the analytical and problem-solving skills we use day-in day-out with our clients, for a wider purpose. Whilst our efforts on COVID-19 will be paused we are taking our approach to other topics.
Watch this space.
Sunday 5th July
The impact of COVID on wildlife conservation.
Coronavirus has impacted wildlife, both species and habitats, in a huge variety of different ways. Cities round the world have had reports of animals roaming the deserted streets of cities. Between April and May, a 10% reduction in global fishing was recorded; potentially giving depleted species and ecosystems some much needed restoration time. Areas of great natural beauty, such as the Great Barrier Reef, are typically overcome with tourists, which can have hugely damaging effects on the area. The lockdown brought on by COVID-19 has allowed these areas to recover and charities such as the Coral Nurture Programme to replant and nurture reefs and similar areas.
In return for the positive outcomes, COVID-19 can also sadly be seen to have an equally destructive effect on wildlife conservation. Legal fishing numbers may have decreased; however, the likely rise in illegal fishing, due to a reduced number of marine law enforcement and sustainability agencies to monitor it, is likely to erode any positive impact.
Without tourism revenue, game reserves throughout Africa can no longer afford to pay their rangers, providing an opportune window for poachers. The primary concern in Colombia is that while there is less law enforcement and conversation efforts, illegal deforestation will surge, increasing the already rampant rate of deforestation. More locally, Zoo’s in the UK are struggling to afford to feed animals and are being forced to take out large loans to prevent the introduction of culling.
The common underlier for this devastation is COVID-19’s impact on the tourism industry. Tourism and Ecotourism fund much of the global conservation efforts. The global travel restrictions have meant millions of pounds of income for wildlife NGO’s has been lost. The knock-on effect could last for years, as conservation organisations have had to make redundancies and cut back on wildlife initiatives. To prevent further damage to this industry and to kick-start the recovery, a safe strategy for easing travel restrictions needs to be developed globally. The ‘air bridges’ being agreed between countries is a start to addressing this.
Saturday 4th July
Could COVID-19 boost productivity?
In a recent study conducted by Ipsos MORI, 55% of UK workers believe they are just as, or more productive in their roles when working remotely.
Prior to the pandemic the Office of National Statistics (ONS) released their most recent set of productivity statistics, suggesting a different picture of UK productivity. They reported that UK productivity suffered its worst quarterly drop in 5 years, adding ‘this sustained period of declining labor productivity represents a continuation of the UK’s ‘productivity puzzle’. This term has been coined following the unusual flat lining of productivity since 2010 which is unprecedented in the post-war era.
Although the impact of COVID-19 to global economies is yet to be fully realised, the radical change experienced by the office-based workforce could be the catalyst required to solve the ‘puzzle’ and boost UK productivity. So why is productivity as a statistic important? Real wages have tracked productivity closely since records began in the UK (1860). Therefore, if productivity does not increase, nor do peoples wages in real terms!
Looking forward, the demand to work remotely is here to stay. In the same study referenced above, 61% of desk-based workers said they would prefer to work from home more often. Indicating that the pandemic has inadvertently delivered business leaders with an opportunity to embrace this unprecedented change and invest in enabling the remote workforce. This will be key for navigating through these difficult times whilst the virus continues to spread.
In the long-term, businesses that can successfully deliver an improved and fit-for-purpose employee experience (via remote working), could unlock previously unattainable levels of performance and delivery, thus boosting productivity.
Friday 3rd July
Phase III of lifting lockdown.
In the third post of the series ‘lifting lockdown’ we see the UK prepare for the most extensive lifting of lockdown (planned for July 4th) whilst using targeted controls to protect geographical locations and the wider national recovery.
R factor and Daily Case Rates: The R factor for the UK as whole, remains below the all-important value of 1. It has not dropped materially, but neither has it increased. In parallel to this, the death rate has dropped to it’s ‘normal’ (based on the last 5 years) level for the week ending June 19th. The UK has seen regional increases specifically the city of Leicester which recorded an increases in positive cases (notable as a result of increased testing).
Entertainment: lock-down was lifted a step further increasing the number of people who could congregate together from different households outside. Many non-essential stores are now open assuming they follow safety guidelines (including a reduced social distance requirement). Pubs and restaurants are set to open for the July 4th weekend, also with a reduced social distance and various other measures in place.
Economy: the UK economy has contracted sharply in the 2nd quarter. However, the sharp rebound in the footfall of retailers already open and the lengths the government have gone to in order to reopen bars and restaurants mean that Q2 2020 was likely to be the low point and Q3 2020 should post much better figures than would have been predicted 3 months ago. The governments plan to ‘build build build’ is admirable but unlike the policies of FDR it is intended to invoke, it has little in the way of GDP firepower behind it yet.
Education: this remains one of the critical and contentious impacts of the virus. Some schooling has returned, dependent on year group and region. Full attendance is not forecast till September. However, given the progress in the face of union outcry and the introduction of the social distancing changes, September should be the back stop date for full attendance not the goal.
Controls: social distancing guidelines remain in place, now at ‘one metre plus’, accompanied by recommendations around face coverings. Slightly differentiated guidelines also exist for higher risk categories and those who interact with higher risk categories. The track and trace efforts hit a number of hurdles but have not been fully abandoned, but the government going it alone has – a good thing ultimately.
It is hard to say the UK government handled the outbreak of COVID-19 well, specifics can be found in our coverage. But the focus on safely opening the economy in a quick and targeted away already suggest handling has much improved. The initial battle might have been lost but this is about winning the war.
Thursday 2nd July
Lockdown is easing, testing remains key.
During the months of April and May, Covid-19 testing headlines dominated the newspapers and featured as a key pillar in the government daily briefings. April saw the government racing to meet its 100,000 test a day target, with the entire country watching closely. Three months on and we are seeing the easing of lockdown, however the public focus around testing appears to be diminishing. Testing needs to not only remain a prominent feature in the public eye but be actively ramped up if we want a safe return to economic activity and to avoid another nationwide lockdown.
UK daily testing figures from 30th May (115,725) and the 29th June (133,467) show that testing has been maintained and steadily increased – we need to ensure this continues. Currently tests are only carried out on those who present symptoms. However, it is widely accepted that up to 70% of coronavirus cases could be asymptomatic. If contract-tracing systems are to be most effective, testing must be expanded and made widely available to all members of the public, without the requirement of having to present symptoms.
A current study is being carried out in Southampton where 1000’s of residents a week will be asked to provide a sample in an effort to build evidence for a UK mass testing programme. By introducing the ability to record asymptomatic cases, the UK would be presented with the necessary breakthrough needed to quickly identify local spikes in cases and so implement localised controls, reducing the death toll and preventing further economic damage.
Wednesday 1st July
The application of targeted lockdowns.
Yesterday morning, it was announced that Leicester would not see the same easing of lockdown restrictions as the rest of England. The city of Leicester has recently experienced between 6 and 10 new hospitalisations per day and accounted for 10% of the country’s cases. This has raised concern over an increased spread and a second wave of coronavirus in certain parts of the UK.
Although a tough pill to swallow, a localised approach to increase lockdown measures in Leicester is a good one. Rather than entering another nationwide lockdown that will impact the entire economy, a targeted lockdown will likely be contained faster with fewer knock-on effects. However, it must be noted that a targeted approach that is too specific has proved unsuccessful in Leicester. In other words, placing stronger measures in factories, schools and workplaces, “targeted action”, had not worked. What remains a discussion point, is the timing of applying this lockdown.
During the initial stages of coronavirus, countries were in desperate need of more time. Time to ensure supply chains, health systems and essential services could prepare and operate effectively under restrictive policies and lockdown measures. Along with the need to buy time before entering lockdown, building herd immunity was another commonly identified reason that lockdowns were not implemented earlier.
Now that first waves of coronavirus have come and gone (for most first world countries…), it’s likely that second waves will be approached differently. We’ve all adapted to remote working and essential services and health systems have sustained operations through lockdowns. We know what to expect and we know how to handle it. If case rates approach high values again, there will not be a need to delay the lockdown restrictions. They should be applied rapidly and should be localised to the area of concern, as we will see in Leicester next week.
Tuesday 30th June
What are some of the CEO’s of the Fortune 500 saying?
The Fortune 500 is a list of the 500 largest United States corporations by total revenue. Recent survey results from interviews with the CEOs of these corporations were held in light of the pandemic and provided some useful insight that might be of worth to you or your business.
As a result of this crisis, 75% of respondents believe that technological transformation will accelerate. Observing the adaptation that’s taken place since state-wide lockdowns were implemented, this survey statistic is received with no surprise. Going digital is a must and the faster this strategy is adopted, the more likely companies are to survive.
We’ve previously drawn on Charles Darwin’s philosophy regarding adaptability to change and resilience (refer to 25 June daily blog). Some further insights to the Fortune 500 CEO survey includes that 51% of respondents believe that business travel will never return to pre-pandemic levels. Additionally, 47% of CEOs believe that 90% of their workforce will be back to their usual workplace by January 2021. A significant 26.2% believe that 90% of their workforce will never return to their usual workplace. These insights prove the importance of adaptability.
As we continue to forge new paths as businesses, our success will be reliant on adapting to new environments and pivoting to meet new demands and trends.
Monday 29th June
The impact on poverty in Latin America.
After a delayed start, likely due to Latin America having fewer global travel hubs than other continents, the Americas have become the new epicentre of the crisis. Brazil has recorded the second highest death toll (after the US), with more than 57,600. The high death toll is in part due to the challenge of stopping the spread of the virus; cities have very high population density and leaders have taken little in the way of decisive action. This is combined with the high level of poverty that exists in the major cities, where people have little access to hygiene infrastructure let alone healthcare.
Latin America has faced a long and slow fight on many fronts. Battling crime, poverty and economic crises. Before COVID-19 progress was painfully slow but existed. GDP per capita was increasing at an average of 0.5% over the last ten years. The anticipated contraction in GDP is likely to be worse in Latin America than any other continent according to the IMF. A large part is due to the dependency of Latin America countries on the export of oil and agricultural products. Both of which are facing a drop in demand as well as consumer backlash – or at least backlash when the agricultural products are coming at the expense of rain forests. The resulting impact may force more people below the poverty line of $5.50/day.
In the short term, Latin America will need help in stopping the spread of the virus and providing aid to those who are infected. In the longer term, support has to come in the form of economic development and diversification, including through technological adoption. The benefit to economies and citizens from technology is not limited to developed countries only. Countries like Kenya led the way in deploying M-Pesa (several years ago now!) as a solution to help pull citizens out of poverty. The tragic loss of life in Latin America might hopefully represent the long-awaited catalyst for fundamental change in the region.
Sunday 28th June
The UK’s mass gatherings and protests in May – did they cause a spike?
About a month ago, the UK witnessed large gatherings of people which contradicted government guidelines regarding social distancing. With the May bank holiday seeing people flock to beaches and ‘Black Lives Matter’ protestors lining the streets of cities and towns for weeks. Today we provide a case study of how case numbers and the UK’s death toll (from COVID-19) have been influenced by these mass gatherings.
On the 25th of May, the UK enjoyed high temperatures on a bank holiday which led to crowds flocking to the coast and other outdoor areas to enjoy the sunshine. Pictures circulated on social media and news networks of thousands of people populating Southend beach in a seemingly obvious breach of social distancing restrictions. Likewise, on the 28th of May, the first of the ‘Black Lives Matter’ (BLM) protests occurred in London with over 100,000 people attending the first day of protest. Despite some protesters wearing face masks and taking social distancing precautions, the majority failed to maintain social distancing measures.
Since the 25th and 28th of May, you might expect that case rates – and more recently death rates – would have undertaken a significant spike. Yet the complete opposite holds true. Using our 5-day weighted moving average (WMA) values, case rates have dropped from 2,387 to 1,037 between 25 May and 27 June. That’s a 57% reduction in daily cases. In the same period, death rates dropped 15%.
When you consider that the majority of the protestors would likely have been under the age of 65 this data shows that there was no clear spike in reported cases and deaths. The data supports the restoration of civil liberty and economic activity with the COVID-19 figures still falling despite large groupings of people. It seems like a straightforward solution should be to allow the workforce under the 65-year-old threshold to return to business as usual (BAU). The caveat being those who are required to care for the elderly or vulnerable. These at-risk individuals should have the choice to maintain their remote work, however, it is inefficient for workplaces to be limiting in-office capacity and interactions that have an indescribable ability to connect employees and clients to deliver. The recent change in social distancing measures from 2m to 1+m is one we support as it will enable more industries and sectors to function effectively.
As we realise more important findings like those outlined above, we need to look at the facts and remain logical Our fight against this virus is far from over, but the last month has been one of inspiration and encouragement. The BLM protests united communities around the world, raised awareness of social injustice and proved as a useful case study as we understand more about the spread of coronavirus.
Saturday 27th June
Will this be the start of the virus as a tool of war and terror?
The damage done with respect to the loss of life is clear, close to 500k deaths worldwide (see our dashboards for country specific stats) as too is the immediate impact on the economy with respect to unemployment, GDP forecasts and so on. Many papers talk about a second-wave of COVID-19, a result of letting the guard down too soon and lapses in discipline. Whilst we need to prepare and plan for that, governments also need to look beyond this immediate crisis and at the threats that this may have given rise to.
COVID-19 most likely originated from China. It may have come from a wet market or it may have been inadvertently released from a lab. Regardless of the scenario, it seems highly unlikely that it was released intentionally. The threat that may have now emerged is that terrorists have seen how much damage the intentional release of a bio-weapon can do.
Chemical warfare and viral warfare have been topics that have existed on the periphery for a long-time. They have to date caused damage not through loss of life but through the fear and terror they create. Bullets have resulted in the loss of significantly more lives of civilians and soldiers than chemicals ever have. Governments around the world need to be aware that this may change. They need to spend time preparing for such an event from developing preventative methods, to detection and tracing and then reaction and management.
This post is not intended to create unnecessary fear. The suggestions that the virus was released intentionally are highly unlikely. Yet, rather than simply declaring “things will never go back to normal” it has to be more constructive to identify how things may have changed and what that means.
Friday 26th June
The companies which have prospered in the pandemic.
If you were asked to describe the general feeling of business broadcasts and headlines over the last 2 months, the answer would undoubtedly be bleak. Strict global restrictions, travel and export controls, investor uncertainty and changing consumer habits all contributed to major shifts in market value and behaviour. With this in mind, it’s unsurprising that the industries hit hardest by COVID-19 include airlines and hospitality, who rely on the permission of travel, socialising and crowds. According to an article published by the Financial Times, individuals passing through security checks at US airports last week were down around 80% from last year. More surprising, is that despite retail sales seemingly soaring, the alcohol sector has significantly suffered due to their main streams of revenue, bars and restaurants, being closed in response to restrictions.
While a few may be more unexpected, many of you will have already seen, read or heard the ‘demise’ of the industries highlighted above across news outlets. What seems to be less covered, is the industries that have soared amid the pandemic.
With changing consumer and thus organisational demands, many companies have seen unparalleled spikes in value. Amongst these are giants Amazon, Microsoft, Apple and Tesla, with MVAs (market value added) of $401.1bn, $269.9bn. $219.1bn and $108.4bn, respectively. Additional firms undergoing booms include online payments leader PayPal, telecommunications giant T-Mobile, video conferencing firm Zoom and streaming service Netflix. While these firms were mainly all household names prior to the outbreak of COVID-19, one common factor has indisputably led to their success: technology. Perhaps these giants spotted the opportunity that lay in friction-free consumption, or more likely, they forecasted and acted upon the global movement towards a wholly digital age.
If there’s one thing that businesses can learn from the COVID-19 crisis, it’s that now is the time for technology. So, take advantage and innovate.
Thursday 25th June
We should plan for a second wave before it materialises.
On Monday 22 June, we discussed that R0 proxies for a number of countries are on the rise. This is no reason to panic, but at the same time it’s no reason to stop being cautious.
South Korea has recently declared a second wave of infections as a result of 17 new cases arising in different clusters in large offices and warehouses. The country plans to watch the numbers closely and is ready to take action as the second wave unfolds. Initial policy reimplementation includes social distancing measures returning and large public spaces being banned again. The aggressive yet effective track, trace and test strategy remains a lynchpin in combatting the virus for South Korea. Having coped so well with the first wave, it’s highly likely that the second wave will be contained faster. With fewer cases and fewer deaths.
For the rest of the world – especially those countries that might be on the verge of experiencing a resurgence or second wave – the most effective strategy would be to make use of this time to prepare. If we are to continue the trend of fostering economic recovery, perhaps a “weekend lockdown” strategy will avoid unnecessary or excessive travel and social gatherings over the weekends. Additionally, enhanced shielding will enable those that are young, fit and healthy to return to business as usual. Those that are more vulnerable should be more shielded by being strongly encouraged to isolate and minimise physical human contact.
There is only so much that the rest of the world can learn from country cases studies like South Korea. Ultimately, each country has experienced this invisible beast in a slightly unique way. However, one principle that will need to be adopted by all is a rapid and adaptable response. As Charles Darwin proclaims: “It is not the strongest, nor the most intelligent that survives. It’s the one that is most adaptable to change.”
Wednesday 24th June
Is the US intent on repeatedly learning the same lesson.
The US has been one of countries hit hardest by the pandemic, with over 122,000 deaths. New York became the epicenter of the crisis, through a combination of its significant volume and mobility of people, high risk communities and various policy failings. Yet, as NYC seems to have got the virus under control (case rates are now below 1,000 per day and have been dropping slowly), various southern states are experiencing the opposite.
For the outsider, this would seem strange. The country has huge parts of the geography reopening whilst their R0 factor and death tolls are increasing. Texas for example has an R0 value of 1.43 and on 22 June recorded its highest daily case rate of more than 4,200 new cases of COVID. After witnessing the damage done to the countries two most symbolic cities of San Francisco and New York, you’d hope that other states would leverage the lesson learned. Yet, COVID provides insight to what exists in America. Divides between the North and the South, divides between political parties, divides between states – the list is long. Whereas China acts as one country to the point of being uniform, the US has become the opposite. The country is therefore not making the same mistake, instead states are making similar mistakes all over.
The second part to this is the big divide in how different states earn GDP and personal incomes. New York and San Francisco, with the huge financial and technology engines, were able to get a lot of the workforce back to work remotely. The southern states instead rely on industries where preventative measures are more challenging to maintain; agricultural, manufacturing and retailing. Their economies and citizens can not last long without returning to their physical workplaces. This then becomes a case of calculated risk on what will do more harm at this stage; the virus or the economy.
The months ahead will be sure to show just how united the USA is.
Tuesday 23rd June
The death toll from the virus is plateauing in many countries. What about the long-term death toll from the economic fall-out?
Coronavirus case rates have been flattened in many countries and states. New York and Italy, for example, were once recognized as epicenters of the pandemic and have now reduced their daily case numbers significantly since then. Moving from case rates to death rates, it seems a large number of countries have also managed to flatten their death rates.
Of the 10 European countries in our analysis, Sweden is the only country that is yet to flatten its death curve as a result of COVID-19. When looking at the USA, its California, Florida, Georgia and Illinois that are struggling the most to flatten their death curves. However, as the economy continues to shrink from lockdown policies, it’s likely that poverty rates increase, the inequality gap widens and death rates from non-coronavirus related incidents increase.
The poverty rate in the USA in 2018 was 11.8% and in the UK was 17%. The knock-on effects of poverty include impacts to emotional and physical wellbeing, increased stress levels, increased criminal activity, poor societal relationships, unhealthy family dynamics and malnourishment to name a few. So in the immediate term, focus has been placed on deaths associated to the global pandemic, but it’s time to start forecasting the long-term impacts of lockdowns on society and the (potentially) worse death rates as a result of a shrinking economy.
Monday 22nd June
R0 is increasing.
There’s been increasing discussions around second waves and resurgence in a number of countries. Looking at the data on page 8 of our Interactive Dashboard, the R0 proxies are increasing, however it’s worth reminding you that these proxies undergo minor fluctuations every week or so. The objective is to identify increases in proxy values for a sustained time period – a week or more.
Germany, Italy, Spain and the UK have gripped our attention. Between 12 May and 16 June, Germany only saw 2 days of proxy values at 1 or more. However, since then the country has seen a significant spike in R0 values that have remained well above 1 for the last 6 days. Since 13 June, Italy has also seen increasing R0 proxies and for the UK, increases have been observed since 2 June. Although the UK’s proxy value is still below 1, the sustained increase is alarming. In Switzerland, R0 proxies have been observed to increase from 0.63 to 1.03 between 27 May and 21 June.
A similar story can be told for California, Florida, Georgia, Texas and Washington in the USA. With all these increases, headlines are striking at people’s emotions and stock markets are seeing the impact as the accelerated COVID cases weigh down on investor sentiment.
Increased case numbers and R0 values are worth flagging, but there’s no need to panic. We’ve discussed that jumping in a car is more dangerous than exposing yourself to COVID, and we know that economic recovery requires countries and states to continue lifting lockdown measures. If we are to face a second wave, we’re much more prepared and equipped to contain any outbreaks.
Sunday 21st June
The future of flight.
Following the horrific events of 9/11, all flights in the US remained grounded for 4 days. The biggest carriers at the time American Airlines and United Airlines took a 39% and 42% decline in their share prices respectively. The wider US market felt the impact, with the S&P500 dropping around 11%.
Following the events of COVID-19 (so far), the share price of American Airlines and United Airlines fell by up to 63% and 70% respectively. They rebounded quickly although not of course to their pre-COVID levels. The same is true of UK carriers, such as IAG (owner of BA) and EasyJet.
To be clear, 9/11 and COVID-19 are very different with respect to the airline industry. COVID-19 is a global pandemic, it is not a country specific event. Your chances of dying from COVID-19 are higher than your chances of dying in a plane crash. The airline industry is also very different in 2020 than it was in 2001. Carriers have increased in numbers, the cost of flying is low meaning prices are more affordable and the experience more comfortable, all of which led to a boom in passenger numbers.
A recent article in the FT stated that 81% of the UK population did not intend to fly in the next four months. A large figure which many will read and assume that means they should follow the herd and not fly either. However, consider that around 50% of the UK population don’t fly at all in any given year. Of those that do fly, it is only 15% who fly 3 times or more. This means that the number of people who have since decided not to fly because of COVID-19 is 31%, at most.
Passenger numbers will return. It is a matter of when not it. The onus is for all those involved airports, airlines and passengers to support a safe return to air passage.
Saturday 20th June
Taking action to expedite the opening of mass gatherings.
As our Phase II lifting of lockdown post spoke to yesterday, large parts of the economy are slowly opening up. Sports teams have even been returning to arenas with NYC announcing that it would hold the US Open and the UK announcing the return of the Premier League. With one caveat: only the players will be returning. No fans and not all the support staff.
The average attendance at a UK Premier League football game is just under 40,000 people. With around 290 matches normally played in a year that’s a total attendance of around 11 million people. EY’s annual survey of the Premier League estimates it produces around £7bn of GDP. Some of this GDP will of course be retained with fan-less stadiums; sponsorship, broadcasting, kit sales etc, but some will also be lost.
But that’s just the Premier League. Arenas across the UK are facing the same challenges, and in nearly all cases they don’t even have the same broadcasting opportunities or appeal that football has. Concerts, theatres, Expeditions are struggling to see an end in sight. In the US, there are 121 professional sports league stadiums and arenas which are at risk of not re-opening due to safety measures.
Only a few months ago, headlines were forecasting this really would be the end of the high-street. Queue the lifting of lockdown and hour long (safely orchestrated) queues outside Primark. In the same way that we found solutions to safely visiting retail stores, we need to find ways of getting back to stadiums and arenas. And there are ways. Practical mechanisms like orchestrating alerts and designated human flows, through to deploying digital health passports which leverage Covid-19 testing data. Stadiums, arenas and governments need to get proactive – and the public need to embrace the new norm.
Friday 19th June
Phase II of lifting lockdown
More than 2 weeks since our initial post on “Strategy and plans for the UK’s lockdown exit” and toady we’ve reached alert level 3. The first phase was containing the virus. Phase 2, where we are currently, includes the introduction of smarter controls to lift lockdown.
R factor and Daily Case Rates: Since 2 June, the UK’s R0 proxy has been increasing from 0.79 to 0.96. That’s more than 2 weeks of consistent increases and is a red flag despite that the R0 proxy is still below 1. Additionally, daily case rates remain above 1,000 (see our dashboard for more details).
Entertainment: The first official day of summer starts tomorrow. Google mobility reports are showing increased outdoor/park activity (see post on 10 June), restaurants are serving beers on streets and shops have re-opened. For restaurants and retail, these are steps in the right direction, however progress from this point forward is one of much debate. Check our posts from 13 and 14 June below to see our views on how the restaurant industry might respond.
Economy: it’s becoming more frequent that companies are communicating a phased return to work for their employees. Public transport activity is increasing, and it is now compulsory to wear face masks when communizing via public transport. Remote working is becoming widely adopted for certain businesses for the unforeseeable future, but it’s not that simple…
Education: There is still resistance to reopen schools in the UK. A large majority of this resistance is believed to come from the fact that the government is yet to provide more clarity on how schools might reopen. This morning a £1bn catch-up tutoring fund for England’s pupils was announced, but there is still a desperate need for a detailed education plan to ramp up children’s education and health again.
Controls: Social distancing is still in place and face masks are now compulsory on public transport. The biggest change came yesterday when the UK announced that its virus tracing app would join forces with the Apple-Google model. Tests have shown that both the NHS app and the Apple-Google have faced challenges, but the bringing together of the solutions should allow more effective tracing and protection to the country.
What remains unclear, is a provisional strategy for resurgence. If companies are to move forward with confidence and clarity, the government should communicate the policies that will be reintroduced (or newly introduced) and on what timescales.
Thursday 18th June
What happened to the return of schools.
Reflecting on previous posts (17 and 19 May), we were analysing virus vulnerability to pinpoint who is at the most danger and looked at the impacts of coronavirus on education. Our global learners are still being deprived of their standard education.
More than 1 billion learners (>62%) are still being affected by the coronavirus. The longer schools remain shut, the higher the chance of widening the inequality gap. The most vulnerable members of society are the ones that lack access to reliable electricity, electrical devices and internet connections: the foundations for remote learning. This is urgent.
The general trend in the coronavirus vulnerability data, using the UK as an example, still suggests that older members of society are more prone to virus contraction and death. The age range from 0-19 years old only accounts for 3% of cases in the UK and less than 0.5% of deaths. Looking at Sweden, 0-19 years old accounts for 3% of cases and less than 0.2% of deaths. The situation is very similar in Singapore and South Koreas.
When looking at an older demographic, 20-40 years old, this age group accounts for 23%, 25%, 44% and 38% of coronavirus cases in the UK, Sweden, Singapore and South Korea. For the same age segment, the percentage of total deaths is less than 2% for the UK, Italy and Sweden.
With such a small percentage of cases and deaths in these age brackets, it is clear the children themselves are at minimal risk. With respect to children transmitting to more at risk parents, studies have shown that “children are not, to date [13 May], substantially contributing to the household transmission of SARS-CoV-2”. The risk of transmission from an infected child to an adult could be as low as 1 in 10. With respect to the risk to teachers who are coming into contact with multiple children not just their own, there are safety measures such as PPE and distancing which can and should be put in place.
Some may be thinking the summer provides a longer window of safety, and that the best option is to return in September. The virus is not going to be eradicated come September, but the benefits of education will be if we wait till then.
Wednesday 17th June
Placing fear in perspective.
Covid-19 has resulted in a tragic loss of life around the world. It is a threat which we are still trying to understand and is of course invisible to the naked eye. Both these things have contributed towards a national fear of Covid-19. Which some headlines are only too happy to play to. Yet we need to put the threat of Covid-19, and specifically the threat of dying from Covid-19, into perspective.
The chance of death from a motor vehicle in the US is 1 in 10,000.
The chance of death from drug overdose: 1 in 50,000. Every year, more than 200 million people get malaria and up to 3 million die from it. Assuming that roughly 85% of malaria deaths occur in sub-Saharan Africa (SSA), that’s more than a 1 in 500 chance of death if we assume 1 billion people living in SSA. Chance of being struck by lightning: 1 in 700,000. Chance of death during childbirth: 1 in 500. You can see where this is going.
Ignoring different risk categories, your chance of death from COVID-19 is 1 in 17,500. (Based on global deaths from COVID-19 being 450,000)
We’ve previously discussed how the interpretation of visual data can influence the way people react to the virus. How statistics and data should be used to give people a more accurate perspective. The virus does pose a threat, to everyone, but so too do many aspects of daily life. Yet we still continue with daily life but we take precautions, we wear a seat belt, don’t use our phones and avoid intoxication whilst driving. We don’t stand in high places during storms or go swimming in open water. Until a vaccine becomes affective, we will need to live with COVID-19, using proportionate measures to reduce the risk as we go about our daily lives.
Tuesday 16th June
Challenging the fears behind two meter social distancing.
By now, we are all aware of the social distance guidelines in the UK. No closer than 6 feet or 2 meters. The reasoning for the social distance is clear; droplets of the virus can travel between people, especially when an infected person sneezes or coughs. What is less clear is the origin and justification of the specific distance. The specific distance matters a lot. Not only does it prevent businesses who struggle to adhere to enabling 2 meters, but it also results in public fear – much of which may be unjustified.
Belgium, Germany and Italy all got their R0 proxy below 1 before the UK did, despite their following a 1.5 meter distancing (see page 8 of our dashboard for more info). France got the value down even quicker still and they follow a 1 meter distancing rule, so does China, the country where the virus originated from. The WHO have also clearly advocated that a safe social distancing of 1 meter should be followed. So where does the 2 meters come from?
The origin of the 1-2 metre recommendation dates back to the 1930s, where scientists identified that the majority of droplets from coughing and sneezing fell within 1 – 2 metres but up to 8 meters. This was a time where awareness of the disease and availability of PPE were far less than they are today.
Whilst it is obviously true the closer you are to someone the higher the case of airborne transmission, the viewpoint has moved on from absolute transmission to relative transmission. Newspapers arguing that ‘it is better to be safe than sorry’ and that we should keep the distance at 2 meters are fanning the flames of fear. The data (in the UK and worldwide) is telling us that we can still be safe by distancing at 1 meter or more. The risk is minimal, the benefit to business and the wider economy is huge.
Monday 15th June
How companies will spend their cash.
The impact of COVID-19 on balance sheets has been one of extremes. There have been many situations where cash flows disappeared, businesses have been unable to meet their liabilities and the balance sheet has been eroded. This has been the sad story for a lot of business, especially small ones (!!), across the world. There is however, another side to the story and that has been the record increases in cash that some business are holding.
By the end of March, sterling reserves held by UK private sector companies increased by £58bn. The level of sterling borrowing also increased by roughly £55bn. Both records figures showing that companies are making conscious effort to build up those reserves. As we emerge from the crisis, those companies which have survived have built up significant war chests. Reflecting on the data from the financial crisis in 2008, companies that were actively acquiring saw more than 9% higher total shareholder return (TSR) than non-active companies. This was for short-term TSR (1-year). When looking at long-term TSR (5-years), actively acquiring companies saw 12% higher returns than non-active companies. Consequently, there is no doubt that this pandemic has presented a lot of buying opportunities. Some of this will also be used to embark on large-scale programmes.
For those companies looking to spend their reserves on large-scale programmes, they must acknowledge that the rules for doing this successfully have changed. The virus has shown how easy it is to be caught out when trying to deliver 3 to 5-year projects, when the payload comes at the end. Instead large projects need to be chunked up, delivering standalone outcomes in short sharp busts. Delivering effective changes in a 12-month period (or less!) has to be the way to approach change.
Those companies which don’t embrace the opportunities risk wasting their reserves and their future.
Sunday 14th June
What could the restaurant industry look like after lockdown?
This is the second of the two-piece series that we’re posting this weekend, regarding the restaurant industry.
The CEO of OpenTable, the restaurant-reservation service, has predicted that 25% of restaurants will not reopen. A more thorough study has found that it could be even higher (up to 30%) but, promisingly, it could be a lot lower (perhaps under 10%). The restaurants that do manage to reopen are going to need to adapt to the reality of the post-lockdown environment.
Limited covers and tables spaced far apart may have long been the norm for some of the finest restaurants in the world, but the rest of the sector will now have to accept this too. Social distancing will restrict the capacity and functioning of businesses. A survey was conducted of stakeholders in the UK hospitality industry, asking them if their businesses would be viable with social distancing of 1 metre. 40% of them responded positively but 20% said that they cannot operate with any social distancing in place.
Restaurateurs need to find a way to provide a pleasant customer experience (CX) and generate satisfactory revenues. There are some measures restaurants can adopt to achieve this. For example, implementing a reservation-only policy would allow restaurants to monitor traffic and mitigate the risk of turning away paying customers due to capacity restrictions. Also, any restaurant that operates a pay-at-till model would do well to purchase card machines so that diners can pay at their table, which would also reduce the amount of movement in the restaurant. Another possibility would be to have each waiter serve a section of the restaurant, limiting their interaction with one other.
Recreating the ambiance of old will be impossible for a while; this will deter many, as will the lingering threat of COVID-19. Restaurants need to make a concerted effort to assuage any fears customers may have about visiting.
It remains to be seen how and when any business that has adopted a temporary business model reverts to its “proper” one. If a business has managed to turn any sort of profit during the lockdown, it would be wise to avoid making a switch too hastily. Restaurants need to assess the ‘new normal’, so they can learn how to pivot their businesses accordingly.
Saturday 13th June
How has the restaurant industry coped during COVID-19?
This is the first of a two-piece series that we’ll be posting this weekend, regarding the restaurant industry.
The restaurant industry in the UK had already been enduring a period of instability prior to COVID-19. Most notably, casual dining has suffered a tumultuous couple of years. The struggles of this sector can be attributed in part to the disruption caused by food delivery apps. These apps have made the offerings of established chains seem limited and unexciting, as they have connected customers with a greater variety of styles and cuisines. They also take a healthy chunk of commission with each order. A number of high-profile chains have gone into administration recently, and rumours have been circulating that others are on the brink. Lockdown has only made the situation worse.
During COVID-19, a small number of businesses have managed to carry on without much change, but for the businesses that have not been able to operate normally, their lockdown priority has been to maintain the customer relationship; this has been attempted in a variety of ways. In some cases, restaurants have pivoted their business models. There have been examples of establishments in the casual dining bracket reopening with a simplified, takeaway menu, or restaurants delivering food baskets to customers. This has allowed businesses to maintain their supply chains to some extent, which could curry good favour for the future.
Some high-end restaurants have been selling gift vouchers. Selling credit can help to tie businesses over for a while, but it will also postpone the end of their slump. It does, however, guarantee some degree of footfall after lockdown ends. Restaurants could capitalise on this for marketing purposes.
One popular theme across the sector during the lockdown has been sharing recipes with customers. Even restaurants with Michelin stars have joined the likes of McDonald’s and Pizza Express in releasing recipes. If this tactic has helped to maintain customer interest in a brand, it will be no mean feat. Of course, it remains to be seen whether any of these efforts will reap future rewards.
Friday 12th June
Another week – where’s the R0 proxy?
Two months ago, large scale gatherings across cities worldwide were unimaginable. Yet, there’s been a relatively rapid transition as lockdown policies have been lifted. Parks are full, schools are reopening (for some), restaurants are welcoming customers and there’s a semblance of normality. However, we’ve learnt that the consequences of policy alterations only tend to reveal themselves within the following 14 days through the R0 proxy.
Acknowledging that the data may develop very different trends in the near future, as of now the lifting of lockdowns has resulted in fluctuations in the R0 proxy in the UK and Europe. These have been fractional fluctuations, and looking at Italy, Spain and the UK they have remained under 1 for the most part of May and the beginning of June. They are currently at 0.77, 0.87, 0.77 respectively, which is shown on page 8 of our dashboard.
Sceptics will say that restrictions are being lifted too soon and policy makers need to be more cautious. Yet by and large, countries have the right mechanisms in place and are tracking the COVID-19 data meticulously to detect any chance of resurgence and contain any potential second waves. Consequently, the partial lifting of lockdown in the UK has not yet seen a major recurrence and the UK should continue to move towards the next phase of lifting lockdown (which we are due to post about next week).
Thursday 11th June
How long have we been living with COVID-19?
The posts which we share are intended to provide a sensible and logical data-based view of events. Early on and long before lockdowns were implemented, we started to look at the rate of transmission. Where the headlines were focusing on the total number of cases, which was of course increasing, we looked at the growth trends behind the number, identifying the apocalypse being predicted as unlikely. See the article from Saturday 28th March which stated; “Across all of the 15 major countries in our analysis, accounting for 95% of the total worldwide cases, ALL of them are reducing the rate of growth.”
As such we have yet to speculate on the origins of COVID-19. However, it’s interesting to consider how long the virus has been in circulation for. China announced a small outbreak of pneumonia like cases at the start of January. In the UK, the first confirmed cases were the end of January 2020 which were associated with two Chinese nationals. Four weeks later the UK had the first case of known transmission, and the case rates rose and fell from there. The first known case in China has now been traced back to November 17, 2019. Based on the theory that most cases do not present symptoms, it is likely that the virus originated before November, in China and potentially beyond.
As we continue to discover more about the early statistics of the virus, there’s no doubt that we will leverage this to combat potential future pandemics. But a further understanding of the early statistics of the virus should also serve to provide reassurance that we have lived with the virus before – we were just less aware of it.
Wednesday 10th June
The re-emergence of mobility.
On 6 May, we analysed European mobility trends across six categories: groceries & pharmacies, parks, residential areas, retail & recreation, transit stations and the workplace. Since the last analysis, there is an undeniable trend of mobility shifting towards the median. In other words, we’re approaching mobility levels similar to those seen before COVID-19. (Use page 7 of our interactive dashboard to select a European country and analyse the data for yourself)
Restrictive polices during April resulted in significantly higher percentages of time spent at home for the 9 European countries in our mobility analysis. This ranged from 9% to 27%. The lower bound being the value for Sweden (no lockdown implemented) and the upper bound being the UK and Spain. One month down, time spent at home at the end of May showed a shift from 27% to 16% for Spain, 27% to 22% for the UK and 9% to 5% for Sweden.
Retail & recreation, transit station and workplace mobility have all increased from April to May. However, with summer around the corner and the previously discussed benefits of exercise in our post yesterday, there are no surprises that park activity has increased significantly. In Sweden for example, park activity was up 144% on 29 May compared to a standard day in January.
After accounting for seasonal trends, we seem to be approaching regular mobility levels. A result of fewer restrictions and policies and complimented by the public’s diminishing fear of the coronavirus. This supports a theme we have had throughout the series of posts, that governments, businesses and individuals’ need to find ways of working and living around the virus. This is a very positive sign.
Tuesday 9th June
The impact of COVID-19 on exercise.
Lockdown polices have varied from country to country. Some countries were lucky enough to maintain the ability to undertake outdoor exercise at least once a day during the most restrictive phases of lockdown. Others were confined to their abodes no matter how big or small.
Dr. Megan Roche says that, “Exercise can help manage stress, boost the immune system, and improve energy levels.” It would seem that, by and large the world is aware of these benefits associated with exercise. Both mentally and physically. The proof can be broken up into two parts: (i) increased downloads & engagement with exercise apps and (ii) increased sales of personal fitness equipment.
Apps like Strava, Peloton, SoulCycle and Nike Training Club (NTC) experienced increases in downloads and activity when lockdown restrictions were put in place. Strava and NTC help track outdoor activities, while Peloton and SoulCycle are facilitating indoor workouts, yoga sessions and meditation classes. In the USA alone, weekly active users on NTC increased by 100%. In China, weekly active users increased by 80% for the first quarter of 2020. When it comes to fitness equipment, Peloton has seen a backlog of orders for their stationary bikes. Regular bike sales have also increased since lockdown as people look for alternative modes of transport and new hobbies to adopt during lockdown.
The exercise trends we are seeing suggest that people are investing more time and money into their mental and physical wellbeing. Perhaps this is a result of lockdown restrictions, but similar to the need to “build back better” in terms of climate change, we should also aim to maintain these exercise trends by committing to personal exercise challenges and cementing exercise in our weekly routines.
Monday 8th June
How Germany has emerged from the crisis.
Germany is emerging from the crisis remarkably. Comparing the case data for the UK against Germany shows a stark contrast. The R factor proxy figures for the country are now quite similar, Germany averaging 0.837 for the last 5 days and the UK averaging 0.844. Yet, in absolute terms Germany have had under 10,000 deaths, the UK is over 40,000 deaths.
It is not to do with lockdown. Both countries pursued a similar approach to lockdown, in fact Germany’s lockdown was less draconian. Allowing many large businesses to remain open. Germany also left lockdown faster than many other European countries, including the UK.
The explanation to this is two-fold, partly treatment and partly prevention. Germany has invested heavily in healthcare. Going into the crisis, Germany had 34 ICU beds for every 100,000 people, whereas Spain and Italy had 9.7 and 8.6 respectively. This meant that they were able to offer quicker and wider treatment. With respect to prevention, Germany was far ahead when it came to tracing.
Germany’s local health authorities had been performing local contact tracing several years before the crisis. At the outbreak, Germany recruited a small army of contact tracers. These individuals played dedicated roles in tracing cases and reducing the spread, albeit using traditional labour-intensive methods. Whilst they have been slow on technology (a track and trace App is due to be released sometime this month), it is likely that when the technology is deployed it will do so with the same effectiveness with which people were deployed.
Sunday 7th June
How we interpret data.
The way we frame data has a drastic impact on how we interpret it. Using COVID-19 case data for India, South Africa, Egypt and Morocco we aim to illustrate this. These countries are all experiencing significant increases in coronavirus cases. Using a logarithmic graph, it’s common for people to interpret the flattening of this line graph as a good thing. It might seem like the situation us under control and the visual makes it look like cases aren’t increasing fast at all.
Now, using the same data on a linear scale, the interpretation is quite the opposite. Cases are increasing significantly. This is a true reflection of the coronavirus situations in India, South Africa, Egypt and Morocco. And this is the interpretation that people need to understand.
In support of our thinking today, we share a study undertaken to analyse how well people understand logarithmic graphs. It revealed that only 40% could answer a basic question about a logarithmic graph placed in front of them. Using a linear graph, 80% of the respondents could answer a basic question about the graph. Over and above the understanding of these graphs, respondents’ attitudes towards the two graphs were also different. Information about the global pandemic was used in the experiment and those who were shown COVID-19 death data on a logarithmic scale were less concerned about the health crisis than those who were shown the same data on a linear scale.
In response to COVID-19, we have all had some form of responsibility to own. From self-isolating to supporting new policy implementation. The effort and attitude of our response is certainly linked to how we interpret data. Therefore, it’s the duty of those sharing data-based analyses and visuals to accommodate for the many interpretations that can be drawn from them.
Saturday 6th June
The impact of Covid on the insurance industry.
All business has been impacted by the crisis. For most, this has been a negative impact. Many are in a position now where they have a quantum of the scale of impact in the immediate term and are focusing on understanding and preparing for the medium to longer-term. One industry which is still to quantify the impact is the insurance industry.
In the US, around 40% of companies have business interruption insurance. However, these policies normally always refer to business interruption as a result of a physical event which has taken place. As such, interruption as a result of an invisible enemy, like the coronavirus, is not covered.
On the surface, this may seem like scrupulous insurers using T&Cs to get round paying out on the policies. But if you consider that in the US the amount of money US insurers have in their reserves is less than $800m, you quickly see that paying out would essentially wipe out the industry in a short period of time. Incidentally, wiping out shareholders in those companies along the way.
This is not to say that insurers are ‘safe’. They should prepare for years of legal battles from policy holders and the resulting reputational damage. Beyond managing the fallout from this crisis, they will also need to understand how to start assessing and pricing invisible risks. If they can’t use a quantitative risk-based way of understanding the risk, they will have to embark on trying to price and cover future ‘black swan’ risks. Virus related and other.
In the same way that the Financial Crisis gave rise to Challenger Banks (and, a Challenger Consultancy), this crisis will give rise to Challenger Insurers. And fast.
Friday 5th June
COVID-19 and the impact on climate change.
Lockdowns around the world forced industries to shut down and economic activity to slow significantly. The objective was to slow the spread of COVID-19. As discussed frequently in our daily updates, the coronavirus data supports the fact that lockdown measures have indeed slowed the spread. But that has also had a significant impact on the environment.
Some of the most heavily polluted megacities have reported unmatched declines in pollution as a result of various lockdown policies: Bangkok, Beijing, Sao Paulo and Bogota, to name a few. Images of clear skies and silhouetted mountain ranges went viral as people celebrated the contrast. In Delhi, the air quality index has regularly dropped below 20 during lockdown – an immense reduction when compared to peak pollution figures last year in Delhi where values were as high as 900. The World Health Organisation deems any value above 25 to be unsafe.
The sad reality is that the significant reduction in pollutants was a result of restrictive and economically crippling lockdown policies. As China emerges from the pandemic, so too are air pollution levels in the country and there is a chance that European countries may follow. If we are to do anything about the climate change crisis, the best time for drastic change is now. There is a clear opportunity to build back better and ingrain a more environmentally conscious and sustainable approach into the new normal that we’re currently adapting to.
In an attempt to deliver long-term reductions in pollution levels and ingrain a climate conscious recovery, there is a need to piggy-back off the initial success seen from national lockdowns. Some ‘quick wins’ include incentives to encourage active transport and increased flexibility for employees that can work from home. Active transport includes walking and cycling. Using England as an example, only 1.9% of trips to work are by bicycle, so there is a clear opportunity to re-imagine urban design to foster a more active transportation trend. This transportation shift, in combination with more flexible working conditions, is one we should be diving into. A more large scale change that could support building back better includes the extension on COVID-19 loans to businesses that are carbon neutral or actively combating climate change through their product or service. Support of this kind will give green companies the best chance of recovering and succeeding in the years to come.
Thursday 4th June
What does the new R0 proxy show for SA and other African countries?
On Monday we looked at R0 proxy values for the USA and noticed a spread from 1.26 (Texas) down to 0.75 (Illinois). Today we are analysing these R0 proxy values for some African countries with the highest number of COVID-19 cases.
Of the 5 African countries we are looking at, Morocco and Algeria are the only two with proxies below 1. A good sign. However, Egypt, Nigeria and South Africa are all experiencing alarming values of 1.36, 1.16 and 1.23 respectively. We have previously discussed that African countries had successfully ‘flattened the curve’ by maintaining comparatively low case rates in the initial stages of the pandemic. By example, it took South Africa 56 days to reach 5,000 cases, while it only took 30 days for France and Germany to achieve the same number. However, this resulted in a nonchalant attitude towards the virus, characterised by a widespread disregard for social distancing, reported here at the start of May. Lifting lockdown does not mean social distancing is being lifted. Failure to adhere to the measures in place, especially as they are lifted, is a sure-fire way to recurrence.
Those African countries with consistently high R0 proxy values (above 1) are facing the biggest challenge when it comes to reopening the economy safely.
Wednesday 3rd June
Is consumer confidence catching up with market confidence?
We are emotional beings. Hearing announcements of 10% increases in COVID-19 case rates, accelerating death rates and record high unemployment shook the globe earlier this year. Consumer confidence was low and volatile. In the UK, consumer confidence reached a value of -34 point in May. This is the lowest recorded value since February 2009.
Financial markets were initially in turmoil, dropping around 30% on average. Dire GDP forecasts accompanied the fall in markets. Based on the headlines, it seemed that 2020 would be an irrecoverable year. Yet, looking at the case rate data for COVID-19 – and the clear slow in transmission rates – has provided confidence to the sentiment in our daily posts. In fact, on 12 May we posted our first article on markets where we discussed the confidence being seen by consumers that was reflecting in markets.
Several weeks on, that confidence has continued. The reopening of parts of the economy should support this even further. The contractions in GDP forecast for years to come are being scaled back to contractions which will mainly impact 2020. Looking at how this has affected market, the S&P500 has risen 36% since its low in March, and Europe’s Stoxx 600 is up around 25% since that time. There is still much to figure out, such as travel which is a big direct and indirect contributor to economic performance, but consumer and market confidence should be closer to moving in unison.
Tuesday 2nd June
Strategy and plans for lockdown exit: Phase 1
As countries and individuals emerge from lockdown the safest and most common strategy has been a phased approach. However, there is less clarity on what each phase entails; what will change and when, and the steps within the phases. Our mini-series on lifting lockdown aims to provide some light on phase details, based on the existing data and facts. The mini-series will keep a consistent viewpoint across the phases.
In the UK, there are currently three overall phases to lockdown. Phase 1 – Containing the virus (I.e. lockdown), Phase 2 – Smarter controls (I.e. lifting lockdown) and Phase 3 – Treatment and vaccines. The UK is moving between Phase 1 and Phase 2.
R factor and Daily Case Rates: Our R factor proxy shows that the UK has a value of 0.9 – a decrease from 1.06 on 27 May (see the dashboard for more detail). Although the government has not set a range, Phase 1’s success will likely rely heavily on keeping an R0 value below 1. Case rates have been decreasing since 26 May and if this trend continues for at least another 7 days, the UK will be “showing that the rate of infection is decreasing to manageable levels”.
Entertainment: As of 1 June, people can mix with up to 6 people from outside their household, ensuring the mixing takes place outside and social distancing is enforced. Competitive sports return behind closed doors, with individual sports confirming they can meet protocols and outline when it’s right for them to start.
Economy: Employees are encouraged to remain working from home where they can. Those who can’t work from home, can return to work but must try to avoid using public transport where possible. Public transport uses are encouraged to wear face masks. Restaurants remain take-out only, pubs can sell takeaway beers and non-essential stores will remain closed until 15 June.
Education: Primary schools opened yesterday, on 1 June. However, some schools and teachers are refusing to return. Re-opening for non-Primary schools is expected to commence on 15 June, however this will be dependent on the R number and case rates before this date. Additionally, the success of the Primary school returns will likely influence this as well.
Controls: Social distancing and face-coverings remain the biggest preventative controls in place. Contract tracing has been introduced with further roll-out planned for the coming weeks. There are currently no differences in rules for members of different age groups.
The current trend for some of the countries hit the hardest by COVID-19 is a good one. Lockdown restrictions continue to ease, economies are showing initial signs of sustained promise and there is a hint of normality resurfacing. The UK is no exception.
Monday 1st June
What does the new R proxy show for the US?
Our R0 proxy values for the US are reasonably spread from state to state. At the top end of the range, we have Texas with a calculated proxy value of 1.26. This has been increasing since 27 May and should be monitored carefully in the next week. Continual recordings above 1 might force Texas to reconsider some of its lockdown restrictions. At the bottom end of the range, we have Illinois with a calculated proxy value of 0.75. Illinois has experience 3 days of R0 proxy values below 0.8 – a very good sign given that the third phase of reopening has just been announced.
New York, still the worst hit state, has kept its R0 proxy at 0.9 (or less) since 20 May. This aligns nicely with phase one of reopening set to take place either this week, or next. California, Massachusetts, Michigan and New Jersey currently have R0 proxy values of 1.12, 0.8, 1.01 and 1.07. Keeping in mind that values above 1 suggest that the virus will continue to spread, the USA is not out of the woods just yet.
Despite R0 proxy values that are fluctuating on either side of 1, many states are attempting to reopen while taking adequate precautionary measures to combat the virus. If we start noticing that states (and countries) can operate effectively in the presence of the virus, there is a high chance that economic recovery will take on more of a V-shape as opposed to a U-shape. A V-shaped recovery is faster and better for business.
Sunday 31st May
Do climate conditions boost the spread of the virus?
We’ve discussed many factors that could be playing a part in how the virus behaves and impacts the global population. A topic we’ve yet to cover is the effect of climate conditions on COVID-19. The Centre for Evidence-Based Medicine (CEBM) undertakes rapid evidence reviews to understand potential accelerators of the virus and they’ve suggested that dry and cold conditions appear to boost the spread of the virus. This is attributed to two mechanisms: the stability of the virus in different environments and the effect of weather on people’s immune systems.
A more recent study analysed the effects of latitude on COVID-19, where initial evidence suggests that as latitude increases, higher deaths and cases per million are observed. Therefore, the c. 40% of the world’s population that live between the Tropic of Cancer and the Tropic of Capricorn are likely to experience less severe effects of COVID-19 (from a geographical standpoint).
Summer is fast approaching in the Northern Hemisphere, and we can expect that temperatures will be increasing in the coming months. Given that c. 90% of the world’s population live in the Northern Hemisphere, summer could well be a global saviour in crippling the organic spread of the virus. That’s not to say that summer will eliminate COVID-19, but it will certainly relieve some global pressures and buy us more time to quell the virus.
Saturday 30th May
Will the death rate have an impact on the birth rate and why this is important?
The virus has had a direct impact on the population. At the extreme end, it’s reducing the population of countries by 100,000 lives, as is the case in the US (see our dashboard for the most up to date view). There is however potential for longer-term influences to population by way of reducing the birth rate.
The birth rate in the US has been falling year-on-year (with the exception of 2014) and has reached it’s lowest point for 35 years. The Financial Crisis resulted in a clear reduction in the birth rate, as anxiety and uncertainty about the future meant couples were less prepared to embark on the journey. The same will be true for COVID-19. It is true that lockdown will have presented some couples with more opportunity to conceive and access to contraceptives might be more difficult to access during these times. Yet these are short-term events. The longer we have lingering employment and economic concerns, the greater the impact will be on the birth rate.
This impact, however, will not be negative when eyed from a climate change lens. In fact, it will be the complete opposite. Having one less child has been recognised as one of the highest positive contributions that individuals can take to reduce their carbon footprint. For example, having one less child is roughly 36 times more impactful than avoiding one roundtrip transatlantic flight. So perhaps decreasing birth rates as a result of the virus will help solve one of the world’s most pressing issues: climate change.
Friday 29th May
Comparing two ‘R0’ proxies.
For the last few weeks, we have been using an R0 proxy that is a ratio of daily infections to daily recoveries (#1). A new R0 proxy (#2) that we have recently been looking at is derived from a different calculation. It is a ratio of the last 4 day’s infections to the preceding 4 day’s infections. For example, total infections from 5-8 May divided by total infections from 1-4 May.
Although both proxies provide valuable insight about the spreading of the virus, they are basic calculations compared to those undertaken to produce the actual reproductive number, R0. Our more recent proxy (#2) calculations are producing values that more closely reflect actual R0 values reported by official scientific research groups. For example, Germany’s actual R number was reported as 0.94 on 13 May. Our proxy #1 was 0.53 and proxy #2 was 0.89 on the same day.
The second proxy relies on one data source – infection numbers. Whereas the initial proxy relies on two data sources: infections and recoveries. Reducing the number of data sources to perform a single calculation decreases the uncertainty of our results. Additionally, as case data is readily available for all countries in our analysis we will be able to produce an R0 proxy for all of them. This is data you can expect to see in the coming days.
For the European countries that currently appear in our analysis, our R0 proxy (#2) ranges from 1.04 (UK) down to 0.65 (Switzerland). These low R0 proxies support the view that most European countries are maintaining control over the virus. What’s critical now is being able to rapidly restore as much normality as possible, while simultaneously reducing the presence of the virus.
Thursday 28th May
What is behind US unemployment figures?
As the long-term impact on GDPs around the world is being calculated and re-calculated, one economic factor is clear and that is the impact on unemployment as a result of this virus. Nowhere has this been more felt than in the US, where unemployment figures have reached levels previously seen during WWII. However, the number of new jobless applications is falling. The US will be close to the peak of unemployment now, and in the same way we tried to get the focus on the case rates to the trend not the absolute, the same is true of the unemployment figures. New unemployment figures are passed the worst.
However, what will follow next is less clear. Job losses which were expected to be temporary may well become permanent in the short to medium term. There is of course an argument for saying that the recovery in re-employment will follow longer-term growth, and that employment is of course linked to consumer demand, which may take some time to fully recover. But there is also a structural unemployment issue at play. Some of the roles which were being performed pre-COVID will not be the same as roles required post-COVID. Employees that were not adding sufficient value in the supply chain will likely not return at all. Instead, firms will become more efficient with the resources they have.
Post-lockdown China serves as a useful case study for early stories of success and failure for firms trying to reopen. Some lessons learned from post-lockdown China include capitalising on new pockets of opportunity, managing the critical paths for business operation and ensuring a safe return for employees. Having reacted relatively slowly to initial warnings from Asia regarding COVID-19, hopefully western governments will take note of these early lessons for firms trying to reopen. The knock-on effects could help recover employment rates faster.
Regardless of the employment recovery path, workers will have to be more adaptable to the work required. Education will be a big part of this and not necessarily lecture based education (see our previous article on the future of MBAs). This is also why the return to schools is so critical, as education plays a role not only in short and medium employment, but critically long-term employment too.
Wednesday 27th May
Should we be focusing on the number of deaths instead of cases?
In a recent interview with Sunetra Gupta, the Professor of Theoretical Epidemiology at the University of Oxford, she said that looking at “who is dying and what is happening to death rates” is the only reliable measure on which we can base a more rapid lockdown exit strategy. Professor Gupta believes that the R number is not a useful tool in helping countries inform lockdown policy making. She also said that total case numbers should not be presented as they are so reliant on testing rates.
It is likely that the coronavirus death figures will give us a more accurate representation of the truth. However, death data on its own will not inform the best overall decision making. Case and case rate data has been instrumental in many country’s lockdown strategies. This data has also proved useful in helping countries like South Korea identify and react to a recent resurgence of cases. Time and again we have discussed the limited reliability of the data we have at hand, but some view of the situation is better than no view at all. And this view only gets better with more data about the virus.
One point stated by Professor Gupta that can’t be argued is – “In almost every context we’ve seen the epidemic grow, turn around and die away — almost like clockwork. Different countries have had different lockdown policies, and yet what we’ve observed is almost a uniform pattern of behaviour…”. Our dashboard data shows that even Sweden, a country that did not enter full lockdown, has experienced a growth stage, a peak and is now experiencing the “die away”. It is possible then, for immunity to be a driving force in this almost uniform pattern of behaviour.
We advocate Professor Gupta’s recommendation for policy makers to develop more rapid lockdown exit strategies. However, death data alone will not provide an optimal solution. We must leverage all the technology and data we have access to if we are to build back better and faster.
Lockdown is a luxury, and it’s a luxury that the middle classes are enjoying and higher income countries are enjoying at the expense of the poor, the vulnerable and less developed countries.Professor Sunetra Gupta
Tuesday 26th May
We’ve added our forecast for South Africa.
Ten days ago, we discussed that South Africa is in danger of case numbers accelerating. On 16 May, the country had c. 13,500 cases. This number has increased to c. 23,600 cases in less than 10 days and is showing no signs of slowing.
The latest addition to our Interactive COVID-19 Dashboard is our forecast for South Africa (page 10). Our current estimate is that South African cases will plateau at 600,000, with the peak case rate occurring in the beginning of September. Compared to our European and USA forecasts, the virus is spreading in a much slower fashion in South Africa. All European countries and American States in our analysis have seen their peak case rate already. It seems South Africa has a long way to go.
Despite seeing consistent case rates of 5% or more, President Cyril Ramaphosa announced on Sunday 24 May that all provinces will move from level 4 lockdown restrictions to level 3 on 1 June. This decision has been made to help reopen most of the economy and provide the public with more freedom, but the fear is that infection rates will still be high at the time.
That being said, the number of cases per death (discussed on 18 May) in South Africa is 49. A remarkable number compared to the world average in our analysis of 15 cases for every death. Given the desperate economic situation in South Africa – the need to reopen the economy – and a significantly high case/death ratio, South Africa seems to be making good use of existing data to inform its exit strategy. Granted, cases rates are still relatively high, but the country has realised the need to adapt to a new normal while simultaneously combating COVID-19.
Monday 25th May
The impact to further education.
The tension remains between teachers, unions, parents and pupils in the UK, as discussed in our previous post on 19 May. However, it is not just schools which are facing uncertain times. Higher education institutes around the world are facing the prospect of falling revenues and material cost outlays to support remote learning. A group of institutes feeling this most actually are the hallowed halls of the US MBA network. They are heavily reliant on high fee-paying international students, where annual tuition costs alone approach $100k. This is a large amount of money to invest in one’s career. It becomes even larger when the tuition is delivered online and the highly touted network exists through Zoom. These institutes need to prepare for a monumental shift.
Away from the elite MBA institutes, further education in the UK is also going to see a shake up.
Sunday 24th May
What’s happening in the FinTech scene?
In theory, FinTechs were built for a crisis like this. Their business model is the promise of providing access to money online, be it banking, wealth management or payments. Removing the need for a physical location, or ultimately physical cash. Now is their moment of truth.
Yet in the UK, the FinTech darlings Monzo, Revolut, Starling and N26 saw their growth rate drop by between 18% and 36%. Monzo produced a shock announcing that the founder and CEO would be stepping down, coinciding with a 40% drop in valuation.
One of the reasons behind this is that whilst the FinTech business models were designed for a crisis like this, their balance sheets were not. Many of these firms are less than ten years old. They make little in the way of profits and have little in way of reserves. Their funding comes from investors, who are clearly also affected by the crisis. Most of these firms have sufficient capital to survive only another three-months.
At the other end of the spectrum, the big banks were ready for a crisis. Following a decade of scrutiny, their balance sheets are robust; JPMorgan’s equity capital as a share of the balance sheet rose by 51% between 2008 and 2019. Clearly they are not immune to the pandemic. Loss of earnings, write-downs and redundancies are the reality, but they will survive.
This means a few things. Many FinTechs will not come out of this crisis, not without the help of the big players. Those that do come out, will have a huge opportunity to ramp up market share and to monetise their services. In contrary, this could be the time for incumbent banks to bridge the digital gap while FinTechs are on their knees.
Saturday 23rd May
A view on how to deliver projects in Warp Speed from those who know.
Earlier this month Donald Trump announced Operation Warp Speed. The goal: to have a vaccine for the virus in production by the end of the year. By all accounts it will be a challenge with members of the Trump response team estimating that 18 months from the start of May 2020 was more realistic.
Stepping back from our articles on data we wanted to share an experience-ground article. Rather than trying to assert a scientific opinion, our expertise lies in delivering critical projects quickly. So, we are sharing some thoughts on how to deliver a project in warp speed:
Work back from the Go-Live date: by setting a date when something needs to be complete (in this case a vaccine in production) the question becomes: what needs to be done to hit that date. It will force the team to come up with solutions not problems.
Teamwork: an obvious one naturally, but this is not just ‘internal’ teamwork. That should be a given. This is teamwork with other teams, not just other stakeholders (again, a given) but other actual teams. This is especially relevant for a vaccine where teams are working towards the same goal.
Honesty and transparency: when progress isn’t happening or issues are arising, teams need to be comfortable calling this out without fear of being side lined. Calling something out might mean you lose face, but saving face could risk overall project delivery.
Decision making: probably the one area that slows project completion the most is slow decisions, or worse, no decisions. Decisions which are made by leaders should be difficult, as easier ones should be resolved without leaders. They rely on carefully considered assumptions in combination with hard facts and logic.
For a project to possess all these things is rare. Project Warp Speed will show the degree with which they can be achieved when it comes to curing a global pandemic.
Friday 22nd May
Inflation or deflation – you decide?
There is a strong case behind the inflationary impact COVID-19 will have. There is an equally strong case behind the deflationary impact COVID-19 will have. If there was ever a time to be an economist, it is not now.
On the side of inflation; a war is currently being fought. Wars result in huge government debts. Not only is this a direct cause of inflation, but one of the fastest ways for a government to get national debt down is to erode it through inflation. Germany post WWI and the UK post WWII being two clear examples.
Yet, there is strong case for deflation. Unemployment is at an all-time high and consumer spending has for time almost ground to a complete halt. Emerging from lockdown it is unlikely that either employment or spending are going to enjoy an immediate shot in the arm. Instead they will recover gradually both as a result of lockdown measures imposed and consumer caution.
We have always put a strong emphasis on the data. In this scenario, there is an argument that the data supports the two opposing views in equal measure. Whilst partly true, it ignores the fact that this is unprecedented, and centuries old data is unlikely to have the answer. Instead, the focus should be on what we know in the short term, that case rates are under control. And longer term, that ‘inflation-friendly’ growth relies on investment and education.
Thursday 21st May
What’s happening to the R factor.
A little over a week ago, we explored the R factor. The mercurial data point which determines whether the situation is getting better or worse. Given the confusion around the R factor, we calculated an R factor proxy that was easier to understand and produce. It serves to represent how well the virus is being contained.
Since then, lockdowns have started to lift in the Western world. The lifting itself has been cautious and so too will remain the attitude of individuals themselves. The good news is that since we reported here last week, the R factor proxy data for a lot of countries has not shown a ‘second-wave’. Over the last 10 days the R factor proxy values have changed as follows: Germany has gone from 0.51 to 0.57, Spain from 0.63 to 0.69 and the UK from 0.99 to 0.63. To check other European R0 proxy values, refer to page 8 of the Interactive COVID-19 forecasting & business planning tool.
There has been a slight uptick in Germany and Spain. But case rates in these countries have been 1% (or less) for more than a week. This suggests that Germany and Spain are successfully containing the virus since removing lockdown restrictions. However, if this R0 proxy uptick turns into a trend there will be increased risk of a second wave.
The lifting of lockdown restrictions does not automatically mean that a second wave won’t occur. It does however mean that based on the data, a first wave has been combated effectively. This is a critical difference. Going forward, if countries do begin to see second waves, it is imperative that we stick to the data and leverage successful strategies from the first wave.
Wednesday 20th May
Demand for digital puts tech on top.
On 12 May we looked at the potential impact of COVID-19 case rates on two popular stock indexes: the US DOW and UK FTSE. Today, we have added the S&P 500 and NASQAD to our analysis. Looking at the year-to-date percentage change in value, it’s clear that some indexes are faring better than others. Compared to its stock value at the beginning of the year, the S&P has lost –8.96% of its value. Although this sounds high, keep in mind that the DOW and FTSE are down –14.11% and -19.81% respectively compared to the start of the year. The NASDAQ is at +2.16%, the only index of the four to have gone positive since the end of February.
All four indexes saw their worst point on 23 March, at a time when the world’s COVID-19 case and death rates were still increasing. Towards the end of March were the worst daily case rates, but indexes were already making a recovery.
Throughout this highly volatile period the two “tech-heavy” indexes, the S&P500 and NASDAQ, were impacted the least. The need to ‘go digital’ being a clear reason. Video conferencing is an example of a sub-segment of tech that has been thriving.
Zoom Video Communications has grown by c.140% this year. Slack and Ring Central have also seen impressive growth above 30%. As companies like Twitter and Square announce permanent work from home options for their employees, the future looks bright for these video conferencing companies.
Expect to see some headline making takeovers here as big technology players recognise the opportunities (and earnings!) that COVID-19 is creating.
Tuesday 19th May
COVID-19 impacts to education could expand the inequality gap.
On 18 February, UNSECO’s learner’s data for pre-primary through to tertiary levels of education showed that no schools had been affected by COVID-19. Less than two months later, the spread of the virus had forced 194 countries to implement nationwide school closures, affecting c1.6 billion learners around the world. That’s 91.3% of the global total enrolled learners. Since this peak in April, fewer learners are being affected as lockdowns are lifted and schools reopen. Today’s data shows that c1.21 billion learners (69.1% of total enrolled) are currently being affected by COVID-19.
Of all the learners affected around the world, it’s those that are the most deprived and vulnerable that will suffer the most. This increases the danger of a widening inequality gap. Schools should be making every attempt to reopen as soon as the right safety measures are in place to do so.
Like our furlough post on Friday 15 May, where we discussed that employees on furlough were resisting to return to work, some teachers and trade unions are resisting the reopening of schools. Teaching is a vocation – like nursing and medicine – which also comes with an unavoidable obligation to society, for which society owes a debt.
In the words of Anne Longfield, the children’s commissions for England, governments and unions should work together to reopen schools “in the interests of children.” This is a time to be practical, not political.
Monday 18th May
How many cases are countries seeing for every death caused by COVID-19?
The world data illustrates that for every 15 cases of coronavirus, there is 1 death (see page 6 of interactive dashboard). The US data shows that for every 17 cases, the country experiences one death suggesting that the hardest hit country (the USA) has an above average case to death ratio. The UK and Italy, however, are amongst the worst performing countries when comparing this ratio with a value of 1 death to every 7 cases. France and Belgium have case to death ratios of 6, while Sweden and the Netherlands both have value of 8.
The world’s healthcare systems were taken by surprise by the pandemic. The numbers suggest that some are coping better than others. Sweden, Netherlands, and the UK are considered to have some of the best social healthcare systems in the world, yet these countries are experiencing some of the worst case to death ratios for COVID-19. As discussed in yesterday’s post, population demographics have been seen to influence the behaviour of this virus but the data shows that even those countries with established social healthcare were no better able to accommodate such as crisis.
When looking at health spending, Sweden and the Netherlands are in the top 8 for the highest spending per capita and the US is ranked number 1 by a significant margin. Given that the US has one of the better case to death ratios of 17, this high spending on health could be a contributing factor. Yet the same cannot be said for Sweden and the Netherlands who have experienced worse case to death ratios.
With a GDP contraction and increased unemployment on the horizon, healthcare systems and costs are likely to change. With the support of governments, this may be an opportunity for those countries where change has a been a long time coming. Social healthcare system or not.
Sunday 17th May
Understanding virus vulnerability.
The numbers are showing disparity when we breakdown COVID-19 cases by age, race and gender. Using the UK data as an example, 27% of cases have been people aged 80 and older. The next closest age group was 50-59 years old at 15%. The general trend in the data shows that older members of the population are more likely to get the virus. When looking at deaths, the same trends are seen with older groups accounting for larger portions of the total deaths.
Age isn’t the only factor that is influencing cases and deaths of COVID-19. Roughly 46% of cases are male, but 59% of the deaths in the UK are male. There is also a materially different impact based on ethnicity, with those of black, coloured and Asian races being hit hardest. The difference in age (and general health) is easy to explain, those older or with poorer health, have weaker immune systems and are more susceptible. The difference in race is less well understood. Some theories relate to variance in level of vitamin D synthesis the body can perform based on race. Others to differences in typical diets. Understanding these differences is critical to developing a vaccine and in the meantime, effectively managing the virus.
As we continue to collect more data and understand more about the virus, we can incorporate more targeted lockdown techniques to shield those that are most vulnerable. Depending on data-based vulnerability, the strategy may need to take different forms. Some people could be encouraged to stay at home while others could be encouraged to get back to work and the benefits are twofold: a reduction in the number of people dying from the virus and we can stimulate economic activity again.
Saturday 16th May
Who’s at danger of resurgence.
On 1 May, South African President Cyril Ramaphosa announced the first few steps to ease lockdown restrictions after 5 weeks of nationwide lockdown at Level 5. One of the Level 4 policies allowed the public to exercise within 5km of their homes in the morning, from 6am to 9am. What followed of course, was South Africans descending on public spaces en masse to exercise. Two weeks on from Cyril’s Level 4 exercise policy was implemented and case rates have been increasing.
In the last week of April, case rates dropped from 7% to 5%. Since South Africans have been congregating in public spaces to exercise, this has risen to 6%. It may not sound like a significant increase, but 6% on 14 May equates to c.650 new cases while 6% on 1 May equated to only c.315 new cases. This compounding effect is the reason South Africa is in danger of case numbers accelerating, despite great success in slowing the initial spread of the virus.
South Korea has also seen daily cases increase in the last week. New daily cases increased from 3 to 35 between 5 May and 11 May – producing the highest recorded value since 9 April. The proven contact tracing and immediate action should contain this recurrence, but South Korea is erring on caution and are prepared for a second outbreak.
Spain, Belgium and Germany have also seen increases in case rates in the last two weeks. There should be three key focuses in the weeks ahead: (i) continual review of lockdown exit strategies and policies (ii) a cautious, yet fearless mentality toward the virus to allow economies to re-open (iii) an effective resurgence plan to contain a second outbreak.
Friday 15th May
Ending or extending furlough schemes.
Rishi Sunak has confirmed that the UK’s furlough scheme will be extended to the end of October, providing further financial assistance for the employee and employers in the UK. Roughly 1 in 4 employees in the UK were placed on furlough in the last two weeks of April. That’s around 7.7 million people, with a cost of £14 billion per month.
The UK’s unemployment rate increased to 4% by the end of February and has been forecast to reach 7.1% by the end of May. When looking at the USA, the unemployment rate jumped from 3.5% in February to 14.7% at the end of April. The highest recorded value since the Great Depression. Unlike stocks that have a relatively short recovery time, economies and unemployment rates take longer to recover. There’s growing concern on the mental health implications of this.
Yet, workers seem to want it both ways. As physically getting back to work is encouraged, it’s becoming apparent that some employees are resisting the urge to return. Some resistance is rightly related to safety concerns and exposure to the virus. However, as firms invest in making their working space safe that resistance is coming from a different place: the reluctance to forego a “paid holiday” furlough. Why work, when you can be paid not to. The benefits of working have been proven time and again to go beyond the money received in one’s pocket. Further than this it is a mindset, for those who believe in the value of their work and those that don’t, those who earn rather than get paid. It is a mindset between an employee and entrepreneur.
Our COVID-19 data shows what is widely acknowledged, that the US has been hit the hardest by this crisis. But we will soon, if not already, be moving to the second leg of this crisis, the recovery. Entrepreneurs do very well at recovery; it is again time to test the maxim to “never bet against America”.
Thursday 14th May
The impact of (not really) lifting lockdown for manufacturers and professional services.
On Monday 11th May, Boris Johnson provided the UK with some guidelines for lifting lockdown. The guidelines, which gave limited SMART (specific, measurable, attainable, realistic and timely) goals of lifting lockdown were received by the public with a measure of confusion and limited comfort.
However, our case data (on page 3 of our interactive COVID dashboard) provides justification on why little has changed for the UK’s lockdown measures. Whilst the number of daily cases is not increasing, they are not decreasing at the expected rate either. To add, the R0 proxy which we discussed earlier in the week, underscores the cautious approach that the UK should adopt, for now… (see page 8 of the dashboard).
One of the stipulations for lifting lockdown measures was the need to quarantine anyone coming in from overseas for 14 days. A recent article by the FT highlighted the impact this would have on the ability to effectively re-open production, if they were theoretically allowed to do so. Manufacturers employ many roles that require specialist training and heavily rely on international expertise. While international flights are restricted, the relevant international experts are prevented from working, and production is not effectively or safely re-opened.
Consultants, lawyers and accountants do not rely on complex machinery in order to do their jobs, but they do rely on international travel to fulfil their business needs. These professional services make up a huge part of the UK economy. We have adapted to remote ways of working with relative ease, but that’s not to say it has been done by preference. ‘Lifting the hood’ gives consultants first-hand insight to their clients’ operations and pain points. Analysing data is a big part of what we do, but so too is seeing people and processes first-hand; it is the most efficient and effective approach to diagnosing areas of concern and identifying opportunities for change. At least from our perspective.
Using data to inform decisions is the right way to go. That might mean a cautious start to lifting the lockdown, but it should also mean a more far-reaching lift of lockdown as the data continues to improve.
Wednesday 13th May
The aftermath of lockdown on GDP.
Although markets are recovering, the International Monetary Fund (IMF) is eyeing a global economy which will shrink by 3% this year. On a country to country level, developed European economies are predicted to experience greater losses when compared to their developed Asian counterparts like Singapore, Japan and South Korea. Italy is forecast to see the most significant contraction (9.1%) for 2020, followed by Spain (8%), France (7.2%), Germany (7%) and the UK (6.6%).
Developed Asian countries reacted quickly to the virus. Adopting early widespread testing and rigorous contact tracing. South Korea did not fully shut down its economy, but strict and early action resulted in relatively low total cases and case rates of less than 3% for more than 60 days (see page 6 of interactive COVID-19 dashboard). South Korea has seen a minor contraction of 1.4% for Q1 in 2020 and it is hard not to assume this is a direct result of their case rate data, which was a testament to the speed and extent of their lockdown.
By contrast, European countries reacted slower to the spreading virus, applying late but more restrictive lockdown measures. Spain, UK, Italy, France and Germany are in the top 8 countries with the most coronavirus cases and are forecasted to experience the largest impacts to their GDPs. Similarly, it’s hard not to consider a direct link between restrictive lockdown responses and larger negative impacts on GDP. Sweden did not implement lockdown and the country is expected to see a GDP contraction of 7-10% this year, according to Riksbank.
Data has allowed early detection, tracking and action on the pandemic to help some economies experience less severe impacts than others. Comparatively, we believe that early detection and action on market opportunities could see your company grow and succeed. This is more than a reflection, it is the principle we need to continue adopting going forward.
Tuesday 12th May
What’s been happening to markets and why.
The US DOW and UK FTSE saw their largest quarterly drops since 1987 (-18.5% & -24.5% respectively). Headlines across the world spoke of the biggest financial fall-out since the Great Depression (and even beyond). The immediate data relating to unemployment and the forecasted impact on GDP suggested that the worst was yet to come, with some wondering if financial markets would ever recover to their previous levels. However, financial markets didn’t seem to get the memo.
Shedding their losses and entering a new bull market – defined as 20% rise – in a matter of weeks. The rate of recovery in financial markets has been as unprecedented as their fall. This has been confounding investors from global money managers to simple retail investors. Those who still cling on to the rational markets are wondering how this could happen in the face of the catastrophic hit on earnings.
One of the answers must be the impact of sentiment. Sentiment from consumer, governments and investors. Overlaying the changes to markets against what has been happening with COVID-19 case data, it is hard to dispute the role that sentiment is playing in the markets’ recovery. Page 9 of our interactive COVID-19 forecasting & business planning tool illustrates these changes for the US DOW and the UK FTSE. Even when case rates were as high as 20% and lockdowns were in place, markets were seeing substantial rises.
Markets are driven by many elements, some of which are easily understood while others are not. Looking at the underlying data behind known drivers to generate insights is always better than trying to guess the unknowns.
Monday 11th May
Accurate models for unpredictable variables such as societal behaviours and environmental conditions are difficult to create. This makes it even more complex to accurately model R0, or “R nought”, which is the basic reproduction number we discussed a week ago. Nonetheless, we are driven by the desire to develop some view of this relationship to help indicate how countries are managing the pandemic. Afterall, some view is better than none.
By using a ratio between daily infections and daily recoveries, we can identify if a country is containing the virus effectively. Values greater than 1 suggest that more people are being infected daily compared to those recovering daily. In contrast, values less than 1 suggest that a country is seeing more daily recoveries than daily cases therefore the goal is to have the lowest possible value.
The R factor is a key metric. However, it is hard to understand, communicate and calculate without the use of a range. The R factor proxy serves to represent the spread of the virus in a single figure, which is easy to calculate, communicate and compare (see page 8 of our interactive dashboard).
Looking at the European countries in our analysis, Switzerland and Italy have the lowest R factor proxy values: 0.25 and 0.35 respectively. With slightly higher values, but still less than 1 are Austria (0.44), Germany (0.51), Spain (0.63) and the UK (0.99). This suggests that these countries are experiencing more daily recoveries than new daily infections. Despite Belgium’s easing of lockdown restrictions last week, they have a surprisingly high ratio of 2.6, an increase from 2.0 at the beginning of May. This increasing trend places Belgium at higher risk of experiencing a second spike in the weeks to come.
Sunday 10th May
This week we began by looking at the R0 number and particularly at how those countries who have successfully fought COVID-19 have reduced their R number to below 1. We’ll be looking at this in more detail during the upcoming week.
Moving to Africa, we clearly saw that whilst it took Italy, France and Germany between 22 and 30 days to reach 5,000 cases, it’s taken South Africa, Egypt and Morocco 56, 74 and 64 days respectively to reach this figure. Due to having up to two weeks to prepare ahead of Europe, Africa have slowed the initial spread of the virus. But Africa are not out of the woods yet and the indirect impact of Covid-19 on health as a result of other non Covid-19 relates diseases, for which vaccination has dropped, is likely to hit hardest in African countries. Putting additional strain on organisations like WHO UnitedNations.
Understanding how effective lockdown measures have been means we get greater insight into those industries affected the most by COVID-19. We analysed the Google community mobility reports for Europe. For the 9 European countries being analysed, all have experienced at least a 33% reduction in workplace traffic and a 35% reduction in transit station activity. Whilst this sounds concerning, there is another side. The reductions in mobility and activity since the implementation of lockdown policies have also resulted in significant reductions in greenhouse gas (GHG) emissions around the world. We are now in the unique position to ‘build back better’ and invest in low-carbon companies going forwards as well pressuring energy giants to ramp up their renewable programmes even quicker like Shell, BP and ExxonMobil.
Yet the solution to build back better is not so simple as Christiana Figueres points out: “The crux of the matter is that the pandemic-induced financial decisions made over the next 12 months will shape the global economy for the next decade, just when we must halve our emissions.” Our global recovery plan is going to take innovative thinking if we are to devise a coherent solution to address the climate change emergency and the COVID-19 pandemic.
Whilst tonight, the UK await some much-needed guidance on the country’s plan for the next phase of lockdown, we took a look at the UK’s forecast. With none of our KPI’s for lifting lockdown yet being met, it’s unlikely tonight’s changes will be drastic but we will hear change. Most likely we will hear of planned opening dates for transport in to and out of the capital, putting pressure on those travel providers to have solutions in place and fast. Unlike other European countries, the UK’s case rate of 3% doesn’t seem to be falling but instead staying the same. This suggests there’s some areas of the UK that are not controlling the virus.
We acknowledge that the current COVID-19 data has its limitations, but this doesn’t mean it has no value. We should be building models and analysing the current data, albeit with caution, as forming some view of this crisis is better than no view at all. Our opinions can evolve as increasing knowledge about this virus is built, but for now we need to make use of what we have and as Desiderius Erasmus once said, “In the land of the blind, the one-eyed man is king.”
Saturday 9th May
Criticising the data.
There’s been endless scepticism relating to the data associated with the coronavirus and we are happy to accept that this data is likely to have limitations. However, governments, businesses and academic institutions wouldn’t be making use of it if the data was completely useless.
By example, when we first shared forecasts for the UK at the beginning of April, our analysis suggested that the peak case rate would be experienced between the 11th and the 15th of April. As we collected more data, we revised our forecast for the UK such that we predicted the peak would occur before the 19th of April. Now that the country has successfully past the peak case rate (18 April), we can reflect on our analysis and appreciate its evolution that provided useful insight. Regarding lockdown, we had predicted that measures would be eased for the UK by 25 May. Our most recent update yesterday suggests that easing of these measures will more likely take place during 25 May – 31 May. As we await Boris’s announcement tomorrow we are hopeful that our prediction will align with the UK’s strategy, however we will be prepared to learn and evolve our model in the case it does not align.
In the land of the blind, the one eyed man is king.
We acknowledge that the current COVID-19 data has its limitations, but this doesn’t mean it has no value. We should be building models and analysing the current data, albeit with caution, as forming some view of this crisis is better than no view at all. Our opinions can evolve as increasing knowledge about this virus is built, but for now we need to make use of what we have and as Desiderius Erasmus once said, “In the land of the blind, the one-eyed man is king.”
Friday 8th May
This bank holiday weekend will be the biggest test for the British public so far. With more great weather and an imminent announcement from UK Prime Minister Boris Johnson, the UK eagerly await government advice on next steps for a post-lockdown Britain. We have forecasted that the UK will reach 90% of their total cases between 25-31 May. This is one of our KPI’s for exiting lockdown and is where Italy and Germany have also started to ease their restrictions.
Another possible KPI which means the UK should exit lockdown would be a decreasing case rate of 3% and below. At the moment, the UK is between 2-3%. However, instead of slowly decreasing, this number is remaining consistent, which is dissimilar to the other European countries we have looked into. The UK has had the least significant drop-off in case rates since the initial peak; an unusual and concerning sign that there are areas of the country the virus has not been controlled in.
With the lockdown duration currently at 46 days and the media’s depiction of the British public growing tired of the rules, we predict that the UK government can start easing lockdown measures in a more substantial way starting from 25 May.
Thursday 7th May
London’s air quality in lockdown.
As discussed yesterday, lockdown measures have caused significant changes to mobility and activity across all industries. One outcome has been a reduction in harmful emissions that affect human health and lead to climate change. Using London as a case study, we have created this dashboard to understand more about how air pollutant concentrations have changed as a result of the pandemic. The analysis considers 3 of the 5 pollutants that are most likely to affect human health on a day-to-day basis: nitrogen dioxide (NO_2), sulphur dioxide (SO_2) and ozone (O_3).
For the months of January through to the end of April, average nitrogen dioxide levels are at the lowest they have been for more than 5 years. However, the same cannot be said for SO_2 and O_3. Ozone levels are the highest they have been for the last 5 years in February, March and April, and sulphur dioxide levels this year are higher than last year.
Despite additional factors that can alter the concentrations of these 3 air pollutants, including seasonal fluctuations and weather conditions, the numbers show that the pandemic has significantly lowered NO_2 levels in Greater London for the first 4 months of this year. Data-based observations like this will help us “build back better” if we continue to witness significant improvements in air quality as a result of less fossil fuels being burned in the energy and transportation industries.
Yet the solution to build back better is not so simple as Christiana Figueres points out: “The crux of the matter is that the pandemic-induced financial decisions made over the next 12 months will shape the global economy for the next decade, just when we must halve our emissions.” Our global recovery plan is going to take innovative thinking if we are to devise a coherent solution to address the climate change emergency and the COVID-19 pandemic.
Wednesday 6th May
European mobility trends since the pandemic outbreak.
We’ve all had to make substantial changes to our daily routines as a result of the pandemic. On 7 April, we discussed how Google has been creating anonymised Community Mobility Reports to help us understand how effective lockdown policies have been in certain regions and today we’d like to analyse this data in a European context (page 7 of our Interactive COVID-19 Dashboard).
There’s no surprise that retail & recreation, transit stations and workplaces have all seen reduced activity since the pandemic as policy makers have encouraged social distancing and advised against all non-essential travel. For the 9 European countries being analysed, all have experienced at least a 33% reduction in workplace traffic and a 35% reduction in transit station activity. As lockdown measures are lifted across Europe, our mobility trends will likely shift again. It will be interesting to see what European mobility looks like in the “new normal”. It is possible that industries like retail, recreation, hospitality and food will need to revise their business models to accommodate new trends and demands.
The reductions in mobility and activity since the implementation of lockdown policies have also resulted in significant reductions in greenhouse gas (GHG) emissions around the world. With most people thinking that climate change is as serious a crisis as the coronavirus, there is growing interest amongst governments to maintain low GHG emissions post-COVID-19 and “build back better”. This will include stimulating investment in low-carbon industries. To build on this analysis, we are working to incorporate emission data into our dashboard in the coming days so keep an eye out.
Tuesday 5th May
Today we are looking at Africa to understand how some developing countries are coping during this pandemic.
The European countries in our analysis took between 22 days (Italy) and 30 days (France & Germany) to obtain their first 5,000 cases of documented COVID-19, with Belgium being an outlier taking 51 days. When looking at the African numbers, as of today only South Africa, Egypt and Morocco have hit the 5,000 mark and it took these countries 56, 74 and 64 days respectively. This is a positive sign that the virus has been successfully slowed in the three African countries with the most cases. One contributing factor could be that South Africa and Morocco saw their first positive cases in early March – roughly 2 weeks after most European countries – and therefore had more time to prepare for the pandemic.
Sadly, slowing the initial spread of the virus does not mean that these countries are in the clear and due to the fact that they are in the early stages of the pandemic, creating forecasts would prove misleading. Despite South Africa’s nationwide lockdown on 27 March, the country is still experiencing unstable case rates between 3 to 8% and this amplifies the risk of these values increasing as lockdown restrictions are eased. Egypt is also struggling to lower its case rate that has been sitting at 5% for the last 14 days. In contrast, Morocco’s lockdown on 20 March has managed to bring the case rate down to 3% and with lockdown extended to 20 May, Morocco will likely have the virus well contained.
African countries have successfully managed to reduce the impacts of overwhelming health systems so far by slowing the spread of the coronavirus, however they risk resurgence as lockdown measures are eased and workers gain increasing concern about making ends meet.
Monday 4th May
The all-important R0 number seems to be the golden key to unlocking countries that have successfully slowed the spread of the virus. “R nought”, as it is pronounced, is the basic reproductive number that indicates how many cases can be directly generated as a result of one case in a population. For example, an R0 value of 3 suggests that 3 people become infected from one infected patient. Values above 1 cause exponential spreading of a virus, while values below 1 suggest that the virus will not spread.
Although very important, the R0 value on its own is simply a threshold. The severity of the virus and the number of cases contribute to decision making to contain viruses effectively. Additionally, R0 is particularly difficult to model accurately as it is dependent on a wide range of variables that are just as challenging to quantify accurately, such as environmental conditions and societal behaviours.
Regardless of the difficulties faced to produce accurate models and indicative values, one thing for sure is that most models tend to incorporate significant safety factors. On 18 April, we discussed how asymptomatic patients and undocumented cases of COVID-19 have resulted in overstating death rates and underestimating herd immunity. The UK’s recent announcement that the Nightingale Hospital in London is expected to be placed on standby is another example of how a conservative model has ensured the safety of its people. However, with a capacity of 4,000 beds and only 20 (0.5%) being occupied at present it’s hard not to question the precision of the model being used to make decisions. When looking at business, an excessively conservative model could lead to further business closure and deflation of the economy. No doubt the scientists are collecting and analysing more data about this pandemic as it plays out, so hopefully it will result in more precise and accurate models that we can all use to effectively and efficiently make decisions
Sunday 3rd May
Today we are reflecting on the last week of insights where we saw amendments to lockdown restrictions in South Africa, some progress in the USA and some businesses in the UK devising their own exit strategies. Earlier this week we commented on the USA’s patches of progress with some states showing more positive signs of consistently lowering daily case numbers. Simultaneously, Attorney General William Barr suggested that governors take legal action if American civil rights are being compromised.
We have had some requests to look at how population density could be impacting the spread of the virus. Whilst the logical assumption is that it would, we were surprised that the numbers didn’t provide a clear or distinctive relationship. This really emphasises the multi-faceted complexity of addressing this pandemic. However, poor policies like South Africa’s latest exercise curfew adds salt to the wound and places the success of 5 weeks of nationwide lockdown at risk.
Our key performance indicators (KPIs) for countries wanting to lift lockdown restrictions are: (i) consistently low case rates of 3% or less and (ii) reaching approximately 90% of the total forecast cases (current cases/forecast cases). With Oxford University and WHO’s latest announcements suggesting that a vaccine is still a while away, our data-based forecasts can help provide businesses with more clarity to plan for the future. This week we’ll be looking at the all-important R number and what this means in practical terms, along with updated forecasts, additional insights and more.
Saturday 2nd May
There are a number of developing countries that were lucky enough to have more time to plan and prepare for the virus outbreak. South Africa was one of those countries, having confirmed its first case of COVID-19 on 5 March. Three weeks after the first case, President Cyril Ramaphosa announced a national lockdown that successfully kept daily case rates at 7% or less for the entire month of April.
Additionally, Ramaphosa announced a graded alert level system on 23 April in an attempt to provide transparency and communicate a strategy to incrementally lift lockdown measures in the country. However, 1 May marked the first day of changes to pre-existing restrictions where members of the public could only undertake physical activity within a 5km radius of their homes between the hours of 6am and 9am. It seemed inevitable that after 5 weeks of complete lockdown, everyone would be desperate to experience a hint of normality again. Sure enough photos of overcrowded promenades, parks and walkways have since gone viral and one must contemplate the country’s lockdown exit strategy in its entirety.
After 5 weeks of societal cooperation and successful slowing of the spread of the virus, overlooking one element like the physical activity example above, has the potential to erase all the progress that South Africa has made so far. This stresses the importance that policies need to be thoroughly thought through to truly reap the rewards.
Friday 1st May
Countries are starting to ease lockdown measures and businesses are opening their doors again, albeit cautiously. The long-term solution that will enable the world to neglect COVID-19 and its associated economic impacts comes in the form of a suitable vaccine. Researchers at Oxford University have recently started human trials for a potential COVID-19 vaccine and yesterday announced an agreement with a UK based biopharmaceutical company, AstraZeneca, to help accelerate development, undertake large-scale manufacture and potential distribution of this vaccine candidate. The pace at which we can expect to see results is dependent on the levels of virus transmission in the community.
Numerous additional trials have been underway around the world, but results so far have proved unsuccessful. To find effective therapeutics and generate faster results, the World Health Organisation has created a “Solidarity” clinical trial for COVID-19 treatments that aggregates trial data and collaborative efforts from more than 100 countries. Global cooperation combined with hard facts are being used to tackle a world issue and it’s these same principles that businesses should be adopting to take on their toughest challenges.
Elsewhere, in the UK despite a lack of government guidance on an exit strategy for releasing some lockdown measures and restarting the economy, popular fast food chains have taken action and laid down their plans. McDonalds, Burger King and Greggs are all getting ready to open their restaurants for delivery this month.
Agreeing to open 15 stores by 13th May, McDonalds will be doing so at a time where we forecast the UK to have reached 82% of total cases. This is certainly a positive step in the right direction, and it’s excellent that businesses are organising phased reopening plans despite the lack of official government exit strategy. With a vaccine still far off, it’s encouraging to see businesses with this mindset. We are actively helping our clients with their business recovery planning all over the world and will continue to provide this service and the data needed to start putting plans into action.
Thursday 30th April
Over the last week we have been analysing the available COVID-19 data to forecast how the virus will spread in different countries and when we believe it will be suitable for countries to start lifting lockdown measures. Our forecasting approach is available at the bottom of this article and our current key performance indicators (KPIs) to start lifting lockdown measures are: (i) consistently low case rate values of 3% or less and, (ii) reaching approximately 90% of the total forecast cases (current cases/forecast cases).
Austria and Switzerland met both KPIs before lifting nationwide lockdown restrictions. Since Austria released some lockdown restrictions on 14 April, the country has managed to maintain case rates of 1% or less. Switzerland only eased some lockdown measures on Monday, but by this time the Swiss had reached more than 92% of their total forecast cases and had seen consistent case rates of less than 2% suggesting that they have the virus under control.
When Germany and Italy started easing lockdown measures, they had only met one KPI by maintaining consistent case rates of 3% or less. Both of these countries were yet to reach 90% of their forecast total cases before lifting some restrictions. To add, Spain eased lockdown measures before reaching either of our KPIs and has seen increasing case rates as a result. This places Spain at higher risk of experiencing a second peak relatively soon.
When analysing the UK’s data, there has been consistent case rates of 3% or less for the last 4 days but the UK has only experienced 70% of its total forecast cases. Based on our KPIs and current forecast, the UK will only achieve 90% of its forecast cases between 18 and 25 May at which time we expect lockdown measures will be eased. With Boris Johnson set to update the UK on ‘steps to defeat’ the coronavirus later today, we will be interested to see how our current forecasts and KPIs hold up.
Wednesday 29th April
Today we are looking at some potentially surprising insights. We’ve recently analysed how population density might impact COVID-19 growth rates in different countries. Initially, our logical hypothesis was that higher population densities would produce higher daily growth rates.
The image above (the latest addition to our Interactive COVID-19 dashboard) illustrates correlations between population density and daily case rates. The top graph looks at the highest recorded case rates by country and the bottom right graph displays the average daily case rates by country. In both of these graphs, the logical hypothesis would hold true if there was a noticeable trend of bubbles from bottom left to top right. Although not entirely conclusive, it’s surprising that these graphs show no obvious correlation between population density and daily case rates which further helps justify the difficulty of tracking and addressing this pandemic.
If population density doesn’t have as much of an impact on growth rates as initially thought, there could be a call for economic hubs like London and New York to start easing lockdown measures sooner. The enablement of economic activity has been of paramount concern since lockdowns began and research by Glenesk details findings on the impact of COVID-19 for over 6000 British companies: “1 in 4 businesses have stopped trading, but the effect is much worse in some industries…”. Additionally, “93% of firms have experienced a negative impact on revenue since 23 March”. The longer we are in lockdown, the worse these statistics will become. It’s hard to ignore the life threatening, personal experience that Prime Minister Boris Johnson had with the virus. So far, he’s the only world leader who’s been in intensive care fighting COVID-19. As a result, I’m sure that he will not be taking any of the upcoming lockdown decisions lightly…
93% of firms have experienced a negative impact on revenue since 23 March.
Tuesday 28th April
Attorney General William Barr directed all U.S. attorneys to consider taking legal action against governors if American’s civil rights are compromised by measures enforced to slow the spread of COVID-19. Mr. Barr wrote, “Many policies that would be unthinkable in regular times have become commonplace in recent weeks, and we do not want to unduly interfere with the important efforts of state and local officials to protect the public.”
With more than 1/3 of the world’s population experiencing some form of lockdown, it’s clear that the world is taking a stance for careful and prescribed steps to be followed as a consequence of this pandemic. Even if our civil liberties are to be put on hold temporarily, this is a time for us all to act responsibly and do what’s right for society.
However, if society is expected to act responsibly then leaders should too by providing disclosure and transparency. Clear lockdown exit strategies are a pre-requisite to give us the best chance at controlling the pandemic and its subsequent spread, but also to emancipate economic, social and civil pressures that are already being experienced around the globe as a consequence of this incredibly unusual event.
Anybody who takes an extreme view on either side of this argument should carefully reconsider – this is not a time to polarise. This is a time for leadership, clarity and big picture thinking. We will not solve this by being in lockdown for six months. Equally, we will not solve this by acting irresponsibly and selfishly as individuals without a care for society. The sweet spot of this argument is a well-rounded and balanced perspective that incorporates health, social, economic, political and civil issues to devise an optimal strategy to put this pandemic to bed. A clear vision and a way forward is the exact purpose of our data and fact-based analysis.
Monday 27th April
For more than 10 days Louisiana (LA) has managed to achieve daily case rates of 2% or less and has seen more than 90% of its total forecast number of cases. Not far behind Louisiana are Florida (FL), Michigan (MI) and Washington (WS) who’ve seen daily case rates of 3% or less for more than 7 days. In terms of how close these states are to achieving their total forecast number of cases, FL is at 79%, MI is at 88% and WS is above 90%. While lockdown is maintained, it’s unlikely that LA, FL, MI or WS will experience a second spike, consequently we believe that these 4 states will be the first to start lifting lockdown measures in accordance with the USA guidelines.
New Jersey (NJ) has managed to maintain steady reductions in daily case rates for the month of April, with the case rate dropping to 3% on 24 April. Having achieved 72% of its total forecast cases, we predict that NJ will maintain its existing lockdown strategy until the region has seen 80% (112,000) of its forecast cases and case rates remain at 3% or less.
New York (NY) was showing consistent decreases in daily cases from 16 April to 22 April yielding a drop from 5% to 2% in case rates, but has since seen notable increases in daily cases. Similarly California (CA), Illinois (IL), Massachusetts (MS), Pennsylvania (PA) and Texas (TX) have recently seen daily case increases as apposed to decreases. Based on the USA guidelines, these states will now take more time to prove “a downward trajectory of documented cases within a 14-day period”. This week, we expect to see LA, FL, MI and WS acknowledging their great progress in managing this pandemic and revealing their first few measures to lift lockdown. Certainly not impossible, but we are doubtful that we’ll see similar announcements being made in NY, CA, IL, MS, PA and TX.
Sunday 26th April
Despite senior school closure and banning gatherings of 50 people or more, Sweden has kept its shops, restaurants and junior schools open throughout this pandemic. Rather than ordering people to avoid non-essential travel and work from home, Sweden has asked that the population adopt these measures to flatten the corona-curve. Our numbers show that Sweden has achieved lower case rate growth values than the UK for the last 30 days, however both countries had 4% case rate growth values yesterday and today the UK has dropped to 3%. Sweden has also had similar case rate growth values to Belgium through April. When looking at the forecast total number of cases, Sweden has seen 63% of its forecast total, while the UK has achieved just over 72% of its total cases.
Belgium and the UK have both been under lockdown for more than 30 days, yet Sweden has managed to flatten the corona-curve effectively and achieve similar case rate values to other European countries without the need for a nationwide lockdown. Anders Tegnell, Sweden’s chief epidemiologist, has fronted majority of the national response to the crisis rather than political leaders. Additionally, Dr Tegnell likes to focus on the facts and the country’s strategy has been based on scientific simulations. Granted, Swedish culture and exceptional social responsibility could be playing a vital role in Sweden’s ability to flatten the curve, but they are a suitable case study to prove that this virus can be contained without the need for nationwide lockdown measures.
Saturday 25th April
Belgium has recently outlined its lockdown exit strategy – a great relief for the country as it enables local businesses start their roads to recovery. Industry and fabric shops will commence operations on 4 May and a week later all other shops will be opening their doors. The UK however, continues to avoid discussing a lockdown exist strategy and the economy is in need of assistance. Belgium’s lockdown exit strategy announcement comes at a time when it has experienced steady reductions in case rate growth, with the last 4 days recording values of 3%. Following on from yesterday’s update, Belgium’s decision to ease lockdown measures will be introduced at a time when the country is experiencing case rate growth values of 3% or less. Additionally, the country has already recorded more than 73% of its forecasted total number of cases.
Overlaying the UK and Belgium data on our Interactive European Forecasting page (page 2), shows that the UK’s case growth rate is slightly higher than Belgium’s, sitting at 4% for the last 4 days. In addition, the UK’s daily case values are dropping off much faster than the daily case values in Belgium and as a result we believe this momentum places the UK in a suitable position to incrementally ease lockdown measures. We forecast that the UK’s case rates will drop below 3% in the next 7 days and this drop should continue. If Belgium is anything to go by, the UK’s strict lockdown should not be around for much longer.
Friday 24th April
Today’s analysis focuses on the Interactive European Forecasting page of the dashboard (page 2) – try to reproduce it once you’ve read the following paragraphs. When Spain entered lockdown on 14 March, it was experiencing steep increases in the number of daily cases, translating to a 37% case rate growth. On 13 April, Spain started to ease some lockdown measures by allowing construction and manufacturing workers to go back to work. At this time the country was experiencing relatively consistent decreases in the number of daily cases, translating to a 3% case rate growth. However, since easing lockdown measures Spain has seen slight increases in the number of daily cases and this could impact Spain’s incremental lockdown-lift approach.
For comparison, Austria ordered lockdown on 16 March (similar time to Spain) when its daily case numbers were increasing at 26% – significantly lower than Spain. Austria started easing lockdown measures on 14 April, once it had seen consistent decreases in case rates and the case rate growth had dropped to 1%. Since 14 March, Austria has seen daily case numbers continue dropping. By analysing the numbers alone, Austria’s ability to continue seeing decreases in the number of daily cases is a result of a much steeper drop off slope than Spain.
The takeaway for other European countries is that if they are experiencing a less steep drop off in daily cases than Spain, we can expect lockdown measures to remain for longer than if they had a steep drop off. Based on the analysis above, we predict that a country’s case rate growth will need to drop below 3% before it considers easing lockdown measures. Hopefully this benchmark allows you to use our forecasting tool to check out the case rate growth and number of daily cases for other regions that you are interested in.
Thursday 23rd April
We are excited to announce that we’ve added the USA data and forecast projections to our interactive COVID-19 forecasting & business planning tool. Taking a look at the interactive US forecasting page on page 4 of the tool, you’ll notice a half donut gauge in gold on the screen– that’s what we will be talking about today.
This gold segment indicates how many COVID-19 cases have been recorded in comparison to our forecast total amount of cases for that state. As you can see above, when you select New Jersey, they’re currently 78% through their total cases meaning they’re coming to the end of their fight against COVID-19 at the moment. Looking at the actual daily cases, it’s clear their last 3 days have been fairly flat and are starting to plateau. This is very encouraging and means New Jersey have now got a good handle on the situation.
However, this information is in direct disagreement to a headline from the FT yesterday that focused on the deaths reaching 40,000 in the US, inferring that the pandemic is worsening in The States. From the data we have, it’s clear to see that this is not the case. Whilst every loss of life is a tragedy, focusing on the flattening daily case rate is a truer indicator of how the US and individual states are coping with the virus outbreak.
If we use the same view on page 4 (above) to look at New York, the state has managed to achieve almost 73% of its forecasted total number of cases. As a result, New York is slightly behind New Jersey in terms of reaching its forecasted total number of cases. Nonetheless, they’re daily case rate has been falling steadily for the last 7 days (based on our weighted moving average model) showing that they too are handling the pandemic well.
Analysing our forecast taken from page 4 of the interactive tool above, Michigan is the furthest through its fight against COVID-19. It looks as though its reached 90% of the forecasted total number of cases and we’re dealing with significantly smaller case totals than New York and New Jersey. Although we’ve seen a couple of increases in daily cases over the last two days, it’s clear that Michigan has been flattening their curve since 9th April.
We’ll be adding more states to our forecast list in the next few days, so keep checking our COVID-19 dashboard.
Wednesday 22nd April
Knowledge is power. Never has that phrase been more important than in today’s global climate. Governments and businesses all over the world are using what little data they have to apply nationwide lockdowns, close and reopen schools and predict how their economies will recover from COVID-19. But this pandemic has taught us all just how quickly people can get things wrong. And the headlines have been a mixture of shocking statistics and false hope. This is why at Elixirr, from day 1 of this global pandemic, we’ve been committed to providing the facts, logical information and forecasts based on available data, to helps companies plan for this unknown situation we’re in.
Despite the small fraction of the economy that is thriving during these turbulent times, the majority of businesses are calling for more information about what the short term future could hold.
To that end, we have launched our interactive COVID-19 forecast & business recovery tool illustrating global and European COVID-19 data and forecasting models. By engaging with this dashboard, we’re able to compare how countries are handling the rate at which the virus is spreading and analyse European forecasts to decipher when we can see some semblance of normality return to the continent. Watch the video above to see how to use it.
Later this week we’ll be adding the USA data, by state, to our interactive dashboard, so let me know if there are any other geographies you’d like us to cover as we’re updating this constantly to support our clients and businesses across the world.
We hope you find this a useful and unique way to compare forecast models for counties you operate in and that it can provide some much needed information to integrate into your business recovery planning.
Tuesday 21st April
Analysing the case rate drop off data from other European countries, we can consider scenarios to identify when the UK will start lifting lockdown measures. Spain has seen the steepest drop off in case rates whilst Italy has had the slowest drop off in case rates. Matching the gradients for Spain and Italy produces the “gold zone” in the graph, which enables us to compare the UK’s current forecast with two extreme trends that we have seen in other European countries.
The UK’s current forecast is tracking very similarly to Italy with a slow drop off in case rates. In this scenario, if we assume that lockdown measures are eased halfway down the forecast slope (roughly 2,600 daily cases), then the UK will start to lift restrictions in the first week of May. This is very much in alignment to the most recent 3 week extension from the UK government. If we continue on this track, there should be no reason to further extend nationwide lockdown measures.
However, in the case that the UK sees a steeper drop off, similar to Spain, then the UK will achieve 50% of its case rate peak value in the next 10 days. This means lockdown measures could potentially be lifted earlier than we thought. Once the daily case rate is half of that at the peak and we are seeing a continuous drop off, it’s more clear that the virus is being effectively contained and normal life can slowly begin again.
Monday 20th April
Today we’re looking at Austria. This European country, which directly boarders the Lombardy region of Italy, entered lockdown on 16 March and managed to contain the virus incredibly quickly. Austria took divisive action early and has seen the benefits. It reached its peak exactly 2 weeks after the lockdown, factoring in a 2 week incubation period, and has allowed the country to contain the virus effectively. At its current trajectory, Austria should see the total cases plateau at around 15,000.
During the lockdown, the country employed a mobile testing scheme so those with suspected COVID-19 could call a hotline and request a test to be delivered to their homes. They would receive the results up to 2 weeks later and then inform anyone they’d been in contact with prior. This has kept COVID-19 patients out of hospitals and drastically decreased the rate of infections. This approach has enabled Austria to achieve a 95% recovery rate for the month of April and, if maintained, will result in 14,000 recoveries by the end of May.
Being locked down for a total of one month, Austria is the first European country to kick-start their economy and let people start reopening their businesses, go to public spaces and live a more normal life, with the appropriate social distancing measures in place. It’s encouraging to see the first signs of progress on the continent, and will provide a blueprint for how the rest of Europe deal with the fallout from COVID-19. Unlike Italy, Austria are reopening the entire country with particular focus on their capital Vienna where over 25% of the population live. This being said, it is important to identify that the post-peak trends for case rates could play a massive role in deciding when countries ease lockdown measures. Since Austria’s case rate peak at the end of March, the case rate has been dropping off steeply. Comparatively, Italy’s case rate has been dropping off much more slowly and this could be a contributing factor to the Italian’s current decision making.
For the first time today, the government has cautiously spoken about Britain’s recovery, but there is still very little tangible information for businesses to properly plan. Using data and applying logic is the optimal route to seeing this through and that’s why we’re committed to supplying the best possible forecasts so our clients can start their business recovery planning, wherever their markets. Let me know if there’s any other geographies you’d like us to take a look at.
Sunday 19th April
Our global heatmap is starting to fill with more green. And green is good as it is indicating that countries have been able to flatten the curve and effectively slow the spread of the virus. The countries in our watchlist currently make up 79% of the world’s total cases and all of these countries, except India, have managed to lower their case rates to values of 6% or less. This reflects nicely when we consider the world’s overall case rate. Since the end of March, the world has seen a steady drop in the COVID-19 case rate, from 10% down to 4% today while the death rate is sitting at 5%.
Now that the data has provided evidence that the spreading of the virus is being slowed effectively, the real challenge is maintaining this at the same time as allowing businesses to start operating again. We are seeing initial signs of normality in places like Spain, Italy and Austria so as time progresses, we will be sure to analyse the impacts of easing lockdown restrictions against our initial forecasting models.
On 29 March, New York accounted for 41% of cases and New Jersey accounted for 10% of cases in the USA. Three weeks later and we see that New York has managed to ‘apply the brakes’ as it now accounts for 33% of case, but New Jersey still holds a similar portion of the total cases in the USA at 11%. Although these two states have been able to flatten their respective corona-curves, its Washington (WA) and Louisiana (LA) that have made the most progress having dropped their case rates to 2% or less for the last 5 days. After Trump’s recent announcement of a 3-phase plan to reopen the USA (lead by state governors), WA and LA will likely be setting the example for other states regarding effective lockdown measures and reopening strategies.
Saturday 18th April
By now the extended lockdowns in the UK, South Africa, France and India, to name a few, have probably soaked in and maybe that’s something you are worried about. To help ease this concern, we’d like to share our stance with you. It is believed that many cases of the coronavirus cause no noticeable illness in people. This study suggested 86% of cases were ‘undocumented’, meaning the patients were asymptomatic or experienced very mild symptoms. Even if we take a conservative approach to say that half of COVID-19 cases have been undocumented, then we are already more immune than we thought. Taking this a step further, the current death rates are based on documented cases of the virus where the outcome is death. If we account for the undocumented cases of COVID-19, then the death rates would be lower than those currently being reported.
From country to country, the undocumented cases will most probably vary. From our list of 17 countries, the top 5 that have been conducting the most testing per 1 million people are Switzerland, Germany, Italy, Spain and Austria. For these 5 countries, the average case/death value is 21 cases for every 1 death. The UK’s case/death value of, 7 cases for every death, is significantly lower than the average so we can imply that the UK is understating cases as a result of insufficient testing by a factor of 3. Therefore, it is highly likely that the UK is 3 times more immune than we had originally thought and the death rate is not as high as the numbers suggest.
There’s certainly hard yards ahead and our battle against this pandemic is far from over, but understating figures creates a hyperbolic point of view that can stimulate faster responses and reactions.
Friday 17th April
The USA has revealed its plans to reopen states in 3 phases, with each phase lasting a minimum of 14 days. With help from the federal government, state governors will be administrating the process themselves to incrementally allow more employees to return to work. Picking up from yesterday’s Elixirr update, the intensions of a 3-phase approach are good. Testing is instrumental in providing hard facts about the virus and will give businesses a more transparent view of the situation and we fail to understand why Trump’s team have not made this a priority.
Our model for the USA forecasts that there will be at least 935,000 cases in total, an increase of nearly 40% based on total cases in the USA on 16 April. Nonetheless, the USA has passed its peak (~11 April) and case rates have been dropping steadily for the last 5 days. Assuming a 62% recovery rate, the USA can expect approximately 580,000 successful recoveries if the total number of cases is 935,000. However, recovery data in the USA indicates a significantly slow recovery profile, seen by the blue dotted curve. A potential explanation for this is that limited testing in the USA has pushed the focus to diagnosing COVID-19 cases rather than following up on them. It is frustrating to see national leaders failing to look at the numbers that will undeniably help us all plan for the future, providing transparency that business so needs.
Thursday 16th April
First Secretary of State Dominic Raab has announced that the current UK lockdown measures will be extended for at least another 3 weeks. There’s no doubt they have taken considerable time and effort to make this decision, but the UK needs to be more clear on reopening. Other countries such as Germany, France, Italy and Spain have offered their people timeframes, but the UK seems to be avoiding the answer and hiding from the details. Drip feeding information is understandable given the circumstances, but it’s impossible for businesses to thoroughly plan and prepare to reopen without more government information and communication.
We are trying to provide some transparency on the situation using mathematical models and existing data to forecast when we think businesses will be operational again. Data for the recovery rates in the UK is hard to come by. However, using the world’s recovery data as a proxy, we have been able to estimate recovery figures for the UK. Granted, the world’s recovery figures may vary from the UK, but we believe this prediction is better than no prediction at all.
The most recent forecast for the total number of cases in the UK is set to be 194,000 and will plateau around day 110 (4 June) while UK recoveries will plateau around day 120 (14 June). Based on our model, the 3 week extension announced today takes us to day 82 (7 May) at which point the UK should be experiencing consistent drops in the case rate and will be approaching the total case plateau. The extension is certainly necessary for the UK given its current situation, but if employees are to be taken off furlough and businesses are to recover, the government needs to provide more transparency and seek out data where currently there are gaps.
Wednesday 15th April
We are in the early stages of investigating when we believe work can begin again. Using a similar forecasting approach to the one used to predict total cases and case rates, we have predicted a recovery profile for Spain. The blue dots represent an 8 day weighted moving average (WMA) for the recorded recoveries, while the peach line behind it is our current forecast.
The average recovery rate from 1 to 14 April in Spain is 75%, therefore we have assumed that 75% of the total cases (forecast) will recover. That is approximately 150,000 recoveries in Spain if there is not a second spike. The product of this approach allows us to identify how many outstanding recoveries (active cases that will recover) there are at any given time.
Between day 60 (now) and day 90 (15 May) we are expecting to see an additional 40,000 new cases at which point the total number of cases will plateau. From day 90, our current forecast suggests that there will be 15,000 active cases that will recover by day 120 (13 June). That is an additional month to see the number of active cases drop below 1,000.
The issue now is that Spain has already started lifting some of its lockdown measures as construction and manufacturing workers were allowed back to work on Monday. This opens up the danger of a second spike of COVID-19 cases and could skew our forecasts drastically. Nonetheless, the easing of lockdown measures in Spain will be the first taste of normality and will hopefully set a trend for the months to come.
Tuesday 14th April
On Saturday 11 April we produced forecast evolutions for Germany, Italy, Spain and the UK. Today’s video shows our range forecasts for California (top left), Michigan (top right), New Jersey (bottom left) and New York (bottom right) over the last 10 days. Similar to our previous forecasts, its encouraging to see that as more time passes our predictions are becoming more precise.
Michigan and California had large forecast ranges for their peak case rates when considering the last 10 days of data capture. However, when focusing on the last 6 days of data capture their ranges narrow significantly: 8 to 11 April for California and 8 to 9 April for Michigan. The same narrowing effect is evident for the total number of cases and we will continue to track the evolution of our forecasts as regions begin to see dropping case rates, post peak.
Monday 13th April
Following our forecasts for Germany, Italy, Spain and the UK posted on Saturday, we have included additional data and found that, for countries that have already experienced a peak case rate, the forecasts ranges are narrowing. However, for countries that have not achieved a peak case rate, our forecasts are more likely to change, and the range is more likely to be large. Nonetheless, having some idea is better for business recovery planning than no idea at all.
With our revised forecasts for the UK, we are still approaching the peak case rate and the expected total case range has an upper bound of 172,000. We do not believe that the UK will be the worst affected country in Europe as far as total case numbers are concerned. The total case upper bound for Italy is 183,000 and 195,000 for Spain. The sooner the UK reaches its case rate peak, the less likely it is to be the worst affected country in Europe.
Sunday 12th April
Happy Easter everyone!
The illustration today shows the rate of change vs cumulative total cases for our world focus group. The tough measures in place globally are really working and as such we would like to share a fresh perspective that views the pandemic from a more holistic lens. Today the FT quoted a cabinet minister as follows:
There are concerns among the cabinet we have put all our eggs in the COVID basket and we’re not looking at health in the round — particularly the prospect of a significant number of avoidable deaths.
There are high risks regarding the impacts on mental health, and the long-term consequences that may follow from increased poverty and unemployment. Ministers are also concerned that the focus on coronavirus may be hindering the ability to treat other serious illnesses, such as cancer.
This cabinet minister declined to be named and I think this is a real concern. This view is very practical and pragmatic but in the headwind of emotional headlines it is just not popular. It does not make it any less true. I believe the good news is that there is growing recognition that nationwide lockdowns are not sustainable and we might be back to business sooner than we think to tackle non-COVID related problems. Clearly we need to keep a very close eye on this and as we start planning to achieve normality, enhanced shielding should be identified as a potential strategy to protect those at the most risk as discussed in yesterday’s update.
Saturday 11th April
Germany (top left), Italy (top right) and Spain (bottom left) seem to have successfully passed the peak of their daily case rates, whilst the UK (bottom right) should be seeing its peak in the next 4 days. Watch below to see how our forecasts for these 4 counties have evolved in the last 10 days. And if you’re interested in understanding more about the approach, click here.
The UK’s forecast range for the total number of cases, 105,000 to 174,000, is relatively large compared to the other 3 countries in this comparison. This is because the UK is yet to reach its peak case rate. Once the peak has been achieved, the total case range should narrow.
As we start planning to achieve normality, enhanced shielding has been identified as a potential strategy to protect those at the most risk. A remark from Prof Mark Woolhouse, University of Edinburgh states:
Very crudely, for 80% of us who are not vulnerable this is a nasty virus, it’s certainly a significant health problem, but it wouldn’t overwhelm the healthcare system and it wouldn’t lock down society. If we really bolster that shielding, make a very strong shield indeed, then it buys you a lot more room and it may mean you can relax some measures permanently.
Enhanced shielding in combination with reliable antibody testing could be a suitable solution to achieve some semblance of normality.
Friday 10th April
For the last two days, South Korea has successfully seen case rate growth values of less than half a percent. The country managed to reduce its growth rate from 10% to 0% in just over a month, while it took China an impressive two weeks (half the time). This being said, there is increasing speculation about China’s reported cases of COVID-19. Nonetheless, South Korea provides a useful case study to show that mass testing and rigorous contact tracing produce successful outcomes. On the topic of contact tracing, Google and Apple have teamed up in an effort to develop a technology to alert people if they have recently been in contact with others that have been diagnosed with the virus.
It is a relief to see that Italy, Spain, Australia and Iran have dropped their case rates below 5% as these low rates suggest that the spread has been slowed, the curve has been flattened and health systems will be more capable of managing the situation.
Thursday 9th April
Today we’re focussing on the case rate peak and number of cases in New York and New Jersey. Our model indicates some good news – it forecasts that the case rate peak for New York will be today. This indicates that we should start to see a plateau in the number of total cases in New York. We hope this is useful analysis for your business recovery planning. Let us know if there is any specific analysis you would like to hear about.
Looking at New Jersey, we can see that the peak has not yet been reached. Our estimate is between 9-12th April, reaching between 113,00-130,000 cases in total. This figure is less than New York. In both cases, the model indicates that the lockdown is working.
Wednesday 8th April
Today’s update focuses on how our COVID-19 forecasts have evolved in the last week, using the UK as a case study. Our model forecasts that the peak case rate for the UK can be expected to occur between tomorrow and 15th April. After this, the model indicates we should start to see a drop in the case rate, as well as a plateau of the total number of cases. Our current forecast suggests that the range of total cases we can expect to see in the UK ranges from 140,000 to 172,000.
Tuesday 7th April
For more than 30 days, China has seen negligible case rates and the total number of cases has plateaued just shy of 82,000. A total of five countries have now surpassed the number of cases seen in China including the USA, Spain, Italy, Germany and France. Of these five countries, only Germany has seen an increase in the daily number of cases being recorded, the rest have seen 4 days of dropping case rates. Zooming out to take a global perspective, the world’s case rates for the last 10 days have been slowly dropping from 10% to 7%. Not overly impressive, but these are steps in the right direction that are allowing countries to “flatten the curve” and alleviate pressure from health systems.
In an attempt to better understand how communities have been responding to new policies aimed at combatting COVID-19, Google have been creating ‘Community Mobility Reports’ that illustrate regional trends in movement. These anonymised insights are a brilliant example of how ‘Big Data’ can be used for the greater good of society as we can identify the impacts of policies introduced to take action against COVID-19, but can also recognise the communities and industries that are being hit the hardest by the pandemic. Tech giants such as Facebook and Amazon have an opportunity to leverage Big Data, like Google, and offer publicly accessible reports that inform us and help us reach normality sooner rather than later.
Monday 6th April
New York (NYC) and New Jersey (NJ) still account for the most cases in the USA at approximately 37% and 11% respectively. The positive news is that they both have steadily decreasing case rate growths according to our WMA analysis.
Our forecasts for NYC and NJ suggest that both states should be reaching their peak case rate in the next few days, if not already. Additionally, NYC will reach its maximum number of cases (~304,000) in at least 50 days while NJ will reach its estimated maximum number of cases (~100,000) in at least 45 days.
Washington (WA) – a clear leader last week in terms of having the lowest growth rate in the USA – had a record case rate spike on 3rd April (905 new cases). Nonetheless, our forecast suggests that WA’s peak case rate is a matter of the past and we should see the case rate start to drop in the coming weeks. The total case estimate of 13,000 for WA is expected to be reached in 30 to 40 days.
Sunday 5th April
Today we would like to share our first few COVID-19 case forecasting predictions with you. Our main objective with these forecasts is to create more insight with the philosophy that transparency is better than having nothing at all. Our predictions are bound to change and our model will continually evolve in the weeks to come, but we hope that you find our forecasts useful as your company plans to start developing future business cycles. For details regarding the forecasting approach, refer to the bottom of this article.
The graphs in today’s update have two Y-axes and share a common X-axis (days). The left Y-axis represents the number of COVID-19 cases and is mapped by the dotted curves in blue (model) and orange (actual), while the Y-axes on the right side represents daily COVID-19 case rates and is mapped by the solid grey (model) and solid yellow (actual) curves.
According to our current forecasts, the UK should be seeing the case rate peak in the next 6 to 10 days, after which we should see a drop in case rate growth. Once we have seen the peak growth in the UK, there will be approximately 60 days until we achieve a similar situation to that of China, when the total number of cases plateaus. Depending on how seriously people are taking isolation, cases in the UK could reach as much as 400,000. However, our current estimate suggests that total cases will reach approximately 217,000. This stresses the importance of following the quarantine rules.
Germany and Spain recorded their lowest ever PMIs for more than 20 years. As such, it is crucial that we try to identify when we can expect to see this activity increase again. Our current forecasts suggest that Germany, Italy and Spain have all experienced their case rate peak in the last 10 days, and should expect these rates to start dropping if the relevant isolation measures are being followed.
March saw the service sector activity crash across Europe. Italy’s purchasing managers’ index (PMI) fell to a level below what was seen at the worst point in the financial crisis 11 years ago. As such, it is crucial that we try to identify when we can expect to see this activity increase again. Notwithstanding the spike in case rates in the last 5 days in Italy, we estimate that the country will reach a maximum number of cases of 150,000 to 200,000 total in the next 15 to 30 days.
Similarly, we currently forecast that Spain will take 15 to 30 days to reach its maximum number of cases, while Germany is expected to take at least 30 days to achieve its total number of cases (that we currently estimate to be around 175,000).
Saturday 4th April
In mid-February, China changed the criteria for diagnosing patients with COVID-19 resulting in a significant jump in cases (32% compared to 5% and 6% for the previous two days according to our analysis). On Friday 3rd April, COVID-19 cases in France jumped by more than 40% as the country started reporting cases from nursing homes. This has seen the WMA for the rate of new cases increase significantly in France and we can expect this to take a few days to stabilise, if at all. The changes in diagnosis and alterations to data collection methodologies are just another contributing factor that makes it so difficult to predict when we can expect to see normality again. Nonetheless, we are working on a forecasting tool that should give us some indication of where each country is in terms of reaching its peak cases. Keep your eyes peeled in the coming days.
Tomorrow evening at 20:00 (BST), the Queen will address the UK and it is expected that she will stress the importance of unity in times of national, and global struggle. Hopefully it will include some positivity to close out another weekend of isolation (for most of us).
Friday 3rd April
On Monday, Spain received its lowest number of new COVID-19 cases in the previous 7 days (5,095). Although the new cases recorded in Spain today amounted to 7,472, this is still a reduced rate of new cases and brings Spain’s current case rate down to 8% using our WMA analysis. Going into the weekend with some positive news, Iran has experienced the lowest number of new cases in the last 8 days (2,715) and is showing great signs of containing the spread of the virus. For nearly 3 weeks Iran has kept the case rate below 10% and this has been steadily decreasing.
Keeping the momentum of good news, Nightingale Hospital was officially opened today in the UK. London’s ExCel Centre was transformed into an emergency field hospital in an impressive nine days and is the first of its kind to open in the UK. Completing such an immense task under severe time pressure is a great showcase of what we can accomplish with dedication, teamwork and resilience. Worth noting as we tackle the months of uncertainty that lie ahead.
Thursday 2nd April
Washington is leading the states in the race to achieve a case growth rate of 0%. In the last 7 days WA has reduced its case rate from 14% to 6% (notice the green transition in the heatmap). The next best contender is New York with a case growth rate of 11%. Although there are still hard yards ahead, this is a commendable effort from New York considering that the state still accounts for roughly 40% of cases in the USA.
After having a few days of disheartening COVID-19 news in the UK, Prime Minister Boris Johnson has reiterated the government’s commitment to ramp up testing in an effort to “unlock the coronavirus puzzle”. This is a unique opportunity for commercial labs and biotech companies to step up to the plate and address the challenge at hand. Have you thought of ways your company could be adding value during this global crisis?
Wednesday 1st April
In our latest graphic, we are looking at the weighted moving average (WMA) of cumulative total cases (X-axis) and the daily change of the WMA (Y-axis). It helps us visualise if countries are undergoing increasing case rates or decreasing case rates and allows us to observe at what stage countries are in relation to one another. South Korea has successfully followed a similar path to China and is seeing frequent case rates of roughly 1%. Germany and Italy also seem to have overcome the peak of their daily case rates and will hopefully continue on their downward trajectories. France, on the other hand, seems to be experiencing a steep increase in daily cases. Let’s hope they can dampen the momentum and pump the brakes.
Although the coronavirus is reaching South Africa later than all the other countries in our analysis, they’ve been able to learn fast from the rest of the world to slow the spread of the virus thus far. South Africa declared a nationwide lockdown on 26th March that will last for at least three weeks.
Let’s not forget to clap for our carers and key workers at 8pm tomorrow night. The UK’s health and care workers are on the frontlines working tirelessly for the Nation and we have the opportunity to support and commend them for their exceptional efforts so far.
Tuesday 31st March
We have now added Sweden to our watchlist, an interesting case study. Despite having a similar case rate to the UK, the Swedes are undertaking an alternative approach by staying open for business for the most part. Various cultural differences (half of Swedes live alone), a herd immunity, keeping schools open so that parents can continue working and the Swedish model estimating a lower hospitalisation rate are but a few suggestions for this alternative approach. One thing is for sure – we will be watching them closely in the weeks to come.
All of the countries in our analysis, with Korea and UK being exceptions, have 1 case to every ~1000 members of their respective countries. Comparatively, the UK has 1 case to every 2700 members of the population proving that the measures we are taking to squash the early momentum are working. This is further backed by the fact that since 17th February, the UK has not seen a case growth rate above 50%. Trust in the system and we have the best chance of achieving a semblance of normality at the greatest pace.
New York is still on the decline with a case rate drop from 34% to 29% in the last two days, proving that they still have some hard yards ahead. Of the 12 states in our analysis that currently represent 86% of the cases in the USA, only Georgia and Louisiana had increasing case rates. These changes are relatively significant too – Georgia case rates increased from 11% to 20% and Louisiana case rates increased from 14% to 20%. To ensure these cases don’t keep rising, a collective effort to ‘put the brakes on’ is required and lessons must be learned from fellow states to contain the overall growth in the USA.
Monday 30th March
Here’s some positive news to kick start your week: Spain, one of the most severely impacted countries by the rapidly spreading coronavirus, has received the lowest increase in cases for the last seven days. Our analysis shows that the rate of increase in cases has been dropping steadily for the last week (from 19% to 9%) and Spain are making good progress when it comes to flattening the corona-curve.
Today, a Sky News headline announced that another 180 people have died in the UK after testing positive for the coronavirus. Although this is always saddening news, this is the lowest rate of deaths (12%) for the last two weeks again showing positive signs that the end is in sight.
We’ve also added India to our list of countries under analysis, such that the 16 countries in today’s figure make up 87% of the global cases of COVID-19.
Sunday 29th March
Today, I have included a new chart on the major states in the USA. These 12 states account for 75 to 85% of cases in the USA. By far the major states currently affected are NYC, NJ and CA. However, it is New York that is skewing all the data right now.
The good news with New York is that the rate of change is on the decline. All the measures are working. There is some way to go here. New Jersey is in a similar situation and this really needs to get under control.
Both CA and WA are great examples of getting the problem under control. We are a bit short on data from CA over the weekend so this may change this view either way.
All other states on this list account for about 15 to 20% of the US issue and seem to be getting this under control. Making sure this virus does not take hold like it has in NYC seems to be key. In NYC, the infection rate is 1 in every 327 people while in all other states it is above 1 in every 1,000.
Saturday 28th March
Across all of the 15 major countries in our analysis, accounting for 95% of the total worldwide cases, ALL of them are reducing the rate of growth.
China (0%), South Korea (1%) and Iran (9%) all have the rate of growth of both Cases and Deaths well under control. This is really positive for the world as we know the action we are all taking is working and there is an end in sight.
China and South Korea managed to get the brakes on quicker it seems (although we don’t have early data for China). It looks like it took China 2 weeks from Red (50%) to Green (10%) while Iran took about 3 weeks to do the same.
In Europe, Italy took almost 4 weeks to achieve the same outcome (probably as it took time to implement the first measures – indicated by the fact that they have 1 case to every 654 citizens. The good news is that they are getting there. It goes to show that early action counts. Spain (1 per 638 people infected) and France (1 per 1,737 infected) have managed to get close to green in 3 weeks.
All the major countries have taken steps to get this under control. It looks like a range of 2 to 4 weeks is required to do this. In China’s case, they reduced growth to 0% in this period. Once growth is at 0%, we know decline will start as recoveries start to kick in.
Explanation of Weighted Moving Average
I explain how the figures are calculated in this video. However, it draws on the concept of momentum from trading and is summarised as follows:
- A weighted moving average of the previous 5 days of both total Cases and Deaths.
- To calculate this you simply add each day after multiplying it by a weighting.
- The most recent day gets a weighting of 5 and the oldest day gets a rating of 1.
- For example a data series of 47, 56, 65, 79, 80 would result in a weighted moving average of ((47*1)+(56*2)+(65*3)+(79*4)+(80*5))/15 = 71.
- We then calculate a rate of change between these moving averages. So assume the day before moving average is 64 then the rate of change is – (71-64)/64 = 0.11 or 11%.
- These are the figures displayed in the chart and they represent the rate of change of both Cases and Deaths.
Why is this measure good? It shows whether the actions being taken are slowing the growth of the virus or not. It makes no comment on whether the absolute number is acceptable or whether the health service can deal with the absolute number.
For us, as business leaders, we should be concerned with the rate of change. Why? If the actions being taken are slowing growth (i.e. we have the brakes on) we can see the end and start planning our business cycles.
Continuously focussing on the next milestone (i.e. 10,000 cases, Boris Johnson has the virus, curves that show exponential growth as a result of the law of large numbers etc.) is really a side show for businesses. I hope you all find this way of looking at the problem useful as you set out your plans for the rest of the year.
Explanation of Our Forecasting Approach
Our forecasting approach is based on a growth modelling function known as a generalised logistic function (Richard’s curve) and effectively allows us to develop and adapt S-shaped curves to fit the COVID-19 case profiles for different countries. Using an ordinary least square (OLS) regression, we are able to calculate the square of the difference between actual COVID-19 cases and predicted COVID-19 cases with the overall objective of minimising the sum of the squares. See the example below to help explain the OLS regression.
- Actual data series: 1, 3, 6, 9, 10. Predicted data series, ‘A’: 2, 3, 5, 8, 12.
- The sum of the square of the differences between actual and predicted data will be: (1-2)^2 + (3-3)^2 + (6-5)^2 + (9-8)^2 + (10-12)^2 = 7.
- A different series of predicted data (‘B’: 2, 4, 5, 8, 13) will produce a value of 13 for the sum of the square of the differences.
- Hence, the minimum value for sum of the squares when comparing these two predicted data series is ‘A’ (7) and this data series fits the actual data better.
An optimisation process in excel was used to identify the best values for the variables in the Richard’s curve that allow us to arrive at the minimum value for the sum of the squares, hence a curve of best fit. Manually input variables were tested to challenge the optimised solution in excel, however a more detailed sensitivity analysis will commence on 6th April 2020.