As the U.S. economy begins to emerge from the COVID-19 shutdown gradually, many people are starting to wonder when things will go back to normal.
Others expect things to change. Doubtlessly, things can’t look exactly like what we’re used to… right?
This pandemic has brought so many changes that we are definitely living an unprecedented situation. But when this is all over, will things go back to normal, or will there be a new normal?
Will things Go Back to Normal?
The short answer is “not quite.”
The longer answer is that it could take a while (not until a new vaccine is created), and even then, some things might change permanently.
The new normal after COVID-19 will bring changes in consumer behavior and confidence. And businesses will have to adapt.
We are faced with the opportunity to adapt and overcome this crisis by emerging stronger and smarter. The new normal after COVID-19 is not a bad thing. While change might be scary, we can take this opportunity to reinvent ourselves and become better.
What Will Normal Look Like When the Economy Reopens?
When the economy recovers from the coronavirus outbreak, it’s going to be a different world.
This new normal after COVID-19 will translate into several aspects:
- Increased safety measures at brick-and-mortar stores and other facilities. This might include temperature checks, social distancing, increased cleaning measures, and touchless checkouts.
- Uncertainty about the future. Some scientists and doctors have already predicted a second wave of COVID-19 later in 2020. This apprehension could cause some consumers to save more (and spend less). So this could result in a further economic slowdown.
- Additional government programs to help businesses. Already we have seen the rollout of assistance for small businesses in the form of the Paycheck Protection Program and the Economic Injury Disaster Loan program. Congress is already considering more funding for these programs. And there could be more help along the way. So stay tuned.
- Another part of the new normal after COVID-19 will probably be greater reliance on technology. This change will extend beyond business to how people interact with each other. People will become more comfortable with using Internet tools.
Whatever the new world looks like, it will definitely appear sometime soon. Other countries have proven this as they have already begun reopening.
The U.S. is Already Starting to Reopen
Financial risks and opportunities will present themselves gradually in the new normal after COVID-19 because the U.S. economy will reopen in stages. The Federal Government has created a 3-phase blueprint for states to follow. They are:
- Phase 1: Individuals should continue to practice social distancing. Groups are limited to no more than ten people, and travel is only permitted for essential purposes.
- Phase 2: Non-essential travel is permitted in the second phase. Groups now can have up to 50 people. Vulnerable populations should continue staying at home.
- Phase 3: Employees no longer need to work at home. Vulnerable persons can venture out, but they should continue to social distance. Large crowds are permitted within specific guidelines.
Some states have already started to reopen. These include Texas, Florida, Arizona, and Oklahoma. California, at this time, remains restricted, although some businesses have started reopening.
It’s crucial that you start preparing for the reopening of your business, and, to do that, you need to know what to expect of the new normal after COVID-19.
Learning from China
Coronavirus started in China, and, as such, it’s the country that is ahead of everyone, even when it comes to reopening. The Chinese economy began reopening in mid-April, and it poses China as an excellent case study and role model.
Small and medium businesses have opened their doors again. Public institutions like parks and libraries have reopened in Beijing.
But things are different.
Small shops now sell goods on the sidewalk so that customers can remain outside while shopping and making a purchase. And many people now walk around with a smartphone that has a colored QR code(green, amber, or red), which is required to enter or leave a checkpoint. Other countries are following China’s lead with this so-called contact tracing.
Although no local, state or federal government in the U.S. has adopted such technology, most likely governments will enact new measures to track and prevent the spread of COVID-19.
Investment Risks and Opportunities in the New Normal After COVID-19
As the economy begins to recover throughout 2020, there will be both risks and new opportunities. Some industries will struggle in the new normal after COVID-19, while others will thrive.
The Airline Industry Predicts the Future
One of the casualties of the coronavirus epidemic has been the airline industry. With airline stocks down more than 50% this year, analysts are predicting a slow return to air travel.
A lot of travel is business-related, and companies have learned that e-meetings are cheaper and more convenient.
Consumers also remain apprehensive about vacationing during this time, which puts more downward pressure on the airline industry.
So in the middle of the stock market drawdown, Warren Buffett, one of the world’s most famous business tycoons, sold significant actions in Southwest Airlines and Delta Air Lines. He knew that the post-COVID world will have less air travel for the reasons already explained.
Take a page from Warren Buffett’s book: to make the right investment decisions now, you need to know what the future will look like. Not all industries will be affected in the same way.
You need to keep yourself informed to be able to thrive during the new normal after COVID-19.
Opportunities Will Be Many
Despite the companies and industries that haven’t fared well during the coronavirus pandemic, some areas of the economy have outperformed. For example, many technology companies have experienced increases in revenue and number of customers. The stock price for the video platform Zoom has doubled in price so far. And the Nasdaq is in positive territory for the year.
The new normal after COVID-19 will present many opportunities to adapt and make long-term investment decisions that can produce good returns down the road.
Take interest rates, for example. Mortgages now have some of the lowest interest rates ever. If you ever thought about refinancing a home, now might be a good time.
The Consumers’ New Normal after COVID-19
The Quest for a Vaccine
While government planning may help the economy to get restarted, what the world ultimately needs is a coronavirus vaccine. Such medicine will prevent future infections, allowing the economy to continue without interruption. Also, the creation of an effective treatment would help people recover quickly when they do get infected.
Until effective treatments are developed, the economic revival won’t be complete. And by the time the medicines arrive, the world will already be a different place.
Since the onset of COVID-19 in the United States, consumer confidence has dropped as consumers unsure of the future.
Consumers have reduced their spending, and they are changing how they buy: online stores, home delivery, and social distancing are the norm nowadays. This has affected millions of small businesses, who are impatiently waiting for the economy to reopen.
But many Americans are very wary of coronavirus. They will continue to be until they are 100% sure going out doesn’t pose a risk (even if the Government has already lifted al restrictions.) That’s why A coronavirus vaccine (and a treatment) would help boost consumer confidence, as it would give consumers the peace of mind they need.
And while a vaccine will help strengthen the economy, some of the new digital behaviors will definitely stick.
Preparing for the New Normal after COVID-19
Making changes to your life and business can help you get ready for that new world.
What’s important today is to view the coronavirus outbreak, not as a time to shrink back or panic; instead, look for new opportunities and be ready to adapt to a new world.
To learn more about how your small business can survive and even thrive in the post-COVID world, subscribe to our Camino Financial free COVID-19 newsletter: