Data Trends for Investment Professionals

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COVID-19’s Economic Impact (Thus Far)

Over the past months, we’ve watched the dramatic and unprecedented impact of COVID-19 on society, the economy and markets. Through these waves of uncertainty, our curiosity around how these effects will manifest in the world’s data continues unabated.

Based on input from industry insiders and Quandl’s data science team, here are the five categories of data (and the related questions they answer) that we find most interesting and important right now.

1 – Supply Chain

Our first category is supply chain data.  In particular, information pertaining to disruptions and shortages, logistical issues, inventory buildup or depletion, factory closures and restarts, transport and delivery bottlenecks and so forth.  Because global commerce is tightly coupled and highly optimized, we find ourselves asking:  is the system sufficiently resilient to the kind of shock COVID-19 has dealt?  Quandl is monitoring a slew of supply chain and logistics datasets (GSCR, CSAM, ISM) to better understand and answer this question.

2 – Small Business Performance

While it’s painful to watch, we’re seeing clear indications that SMBs are being affected with closures, lost revenue and other high-magnitude disruptions.  This is particularly troubling given that small business is the driving force of local economies and employment across the globe.  Will government relief reach these firms in time?  Can firms survive weeks — if not months — of a shutdown?  Will they be able to reopen easily afterwards?

We are monitoring data around small business payroll, revenue, closures and payments that provide some answers to the questions above.

3 – Employment

Almost every country in the world has seen a dramatic spike in unemployment. This was initially driven by entire sectors (travel, hospitality, entertainment) going into recession. With many regions still under lockdown, unemployment remains stratospheric due to hourly worker layoffs and loss of income for local services, small business, freelancers, gig workers, self-employed, contractors and so on.  At Quandl, we’re monitoring hours worked and hiring patterns — at the time of writing, both pictures are critically important to track.

4 – Consumption

It’s apparent that some headline categories such as hotels, airlines, restaurants, and concerts are being decimated. But what about spillover into other categories of consumption?  Will unemployment and the consequent loss of income in certain vulnerable sectors lead to reduced revenue for other, hitherto untouched sectors of the economy?  We’ve noticed discretionary spending has fallen considerably.  Does that stay the case?  Or, as we re-emerge into our regular lives, will we see a snap-back of pent-up demand?

The long-term impact of COVID-19 on the economy will depend critically on consumption, and so we’re watching a wide range of data here — from ecommerce transactions to airline bookings to new car sales to social media sentiment and confidence

5 – Credit

Thus far, the COVID-19 crisis has been a crisis of small businesses, local services, and specific industries; what it has not been is a financial crisis. But the longer the disruptions last, the more the risk of financial contagion. 

As employment falls and consumption declines, debts will go unpaid and businesses will close, hurting lenders.  If credit consequently dries up, that could lead to a more general financial shock.  Conversely, if government intervention is effective at bridging short-term liquidity needs, we could see a tremendous amount of catchup growth in Q3 and Q4.  We’re watching different credit and payments metrics as early indicators of which of these scenarios is playing out.

Using Data to Stay Informed

The coronavirus has utterly changed the shape of global society in just a few short months.  With so many different forces pulling the economy in so many different directions, the uncertainty over outcomes has never been higher.  As a consequence, markets are moving faster and more dramatically than ever before. 

For analysts, investors, and decision-makers, it’s critical to stay abreast of these changes, and that means accessing high-quality insights driven by even higher-quality data.  At Quandl, we’re pushing hard to find the very best sources of data to drive these insights.

Get Quandl’s COVID-19 economic impact newsletter

 

If you’re interested in receiving regular analyses on the topics above and beyond, Quandl has a dedicated COVID-19 Economic Impact newsletter. It’s authored by me (Abraham Thomas, Quandl’s Chief Data Officer) and includes real-time charts and analyses derived from our proprietary data assets and high-value data sources we’ve uncovered, subscribe here.

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