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What industries have benefited from COVID-19?

See all articlescoffee shop during pandemic
Business strategy
By
Tom Butler
Tom Butler
Director
July 2, 2020
7
minute read

Facing the challenges presented by the current world climate

COVID-19 has seen many industry sectors do well. It's important to understand the reasons why these sectors and businesses have performed well compared to others, so that we may effectively plan for future recessions and downturns.

Nash Advisory can help you develop and refine your business strategies. Get out in front of the next recession and plan for the future by contacting us today.

Industries that have performed well through COVID-19

There are several industries that have flourished in the face of a global pandemic. These industries are largely related to the current climate of working, exercising, and spending leisure time at home.

IT services

Many businesses were forced to make their employees work from home spurring a surge in the requirement for IT solutions. In particular, businesses needed to update companywide security systems to protect critical data and employees from cyber attacks.

It has also led to a huge increase in demand for computer hardware such as laptops and servers, as well as home office equipment such as screens, ergonomic chairs and standing desks.

Bike shops and golf shops

As part of the restrictive measures put in place, people were limited in the types of leisure activities they could undertake. Fortunately for the bike industry, cycling was not restricted, which has led to a huge increase in demand for bikes across all user groups – from mountain bikes and road bikes through electronic bikes and scooters.

Golf is another activity that although was initially restricted, was eventually allowed under the distancing rules. This has also caused a huge surge in demand for golf clubs and attire as people flock to golf courses to get their sporting fix.

Education

When schools closed, many students were required to quickly move towards online learning. This caused a huge increase in demand for online learning education providers such as Mathletics, iVET and Education Perfect.

Online learning has now become an integral part of a school curriculum and assessment of student performance, and this is expected to continue into the future.

Online shopping

The increase in online shopping has been well-publicised in the media with online giants like Amazon, eBay, and AliExpress. Even Australia’s Kogan and Temple & Webster have benefited from people buying from the comfort of their couches. The demise of traditional bricks and mortar retail will further add to the increase in online shopping.

There are a number of specific business models that normally benefit from a recession

There are a number of specific businesses and models that have benefited from COVID-19.

Essential Government services

Companies that provide services to essential government institutions such as prisons, medical centres, and hospitals will continue to operate and service the community regardless of the economic conditions.

These organisations tend to see an increase in activity due to community changes where increases to unemployment create more requirements for certain government-provided services. This would include service providers under the National Disability Insurance Scheme (NDIS).

Utility service providers

Companies that provide services to the utility space (electricity, water, gas) tend to fare well during recessions. Activity in these sectors tends to increase as governments look to update and upgrade infrastructure to support new jobs lost during a recession.

Infrastructure

Spending on large infrastructure projects is a popular way for governments to support fragile economies. Infrastructure service providers such as engineering, construction, traffic management, and labour-hire firms all will benefit from new projects announced by governments to stimulate the economy.

Themes to take advantage of post-COVID-19

working from home

The new COVID-19 era will have some lasting impacts which change the way we work and interact. We have outlined some of these impacts below which we believe will create some opportunities for companies willing to adapt to the new normal.

People working from home

More people than ever are now working from home due to the COVID-19 restrictions imposed. Once restrictions ease, we will see people gradually going back to the office. However, it is likely that a large portion of the business community will continue to encourage employees to work from home as it becomes part of the standard working arrangement. This will see a rise in the demand for:

  • Home office setups
  • Communication software
  • The protection of sensitive data

With people working from home, there will be less demand for public transport, and traffic in the city centres should reduce. It will also mean that people will have more time for leisure activities as they do not have to deal with the lost time from the daily commute into the office.

Personal hygiene and social distancing

Since COVID-19 first broke out, people have been much more focused on their hygiene, with the use of sanitary products dramatically increasing. We expect this trend will continue well into the future as the population now becomes accustomed to using hand sanitizer as a part of everyday life.

The positive is that we will likely see a drop in infectious diseases going forward as we have become more hygienic. It is likely that the continued use of sanitary products will remain part of our everyday life.

Less reliance on air travel

COVID-19 has had a huge impact on the aviation industry, with many large airlines facing insolvency. It is expected that a number of airlines will not survive the crisis. This is likely to push up airline prices, as competition in the market for air travel reduces.

The lingering risk of infectious diseases will also add to the reduced demand for international holiday travel. We expect that this will have a positive impact on the domestic tourism market as people will elect not to travel overseas and instead look to holiday locally.

The use of Zoom and WebEx has also changed the way companies conduct business. We see a long-term trend of a reduction in work-related air travel for face-to-face meetings, which will be replaced with web conferencing.

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