State of the outbreak and reopening, Europe:
State of the outbreak and reopening, globally:
- Of the 5 biggest European countries, the UK remains the only country with around 2,000 new cases on a daily basis, whereas the other 4 are stable around up to 300 new cases a day, according to the WHO.
- As a sign of further return to normality, Italy, Spain, Portugal and Greece are loosening their quarantine requirements and opening for tourism as of 1 July at the latest, a vital sector of their economies.
- UK on the other hand announced that from 8 June arrivals from abroad will have to self-isolate for 14 days, but with an exception for truck drivers.
- Another big question in the coming months is how economies will respond to a slow unwinding of some of the government support measures such as short-term work. A recent study by the IFO Institute showed that in Germany alone 7.3 million employees were in short-time work in May, against 1.5 million at the peak of the financial crisis. Whereas the scheme in Germany runs for at least a year, France will slightly lower the government’s contribution to 85% of wages and the scheme in Spain and other countries may expire over summer.
- By the 31st of May, Latin America and the Caribbean accounted for 40% of average global deaths, highlighting the human toll Covid-19 continues to make, while EU and US continue so far to successfully manage the balancing act between containing the virus and reopening the economy.
- An important step towards recovery of the global automotive supply chain was taken this week in the Mexican state of Puebla, where automotive suppliers can now restart their operations to meet client demand from outside the state on a self-declaration basis. Audi and VW plants will remain closed, but will gradually re-open from 15 June, starting at around 15% of capacity.
- McKinsey published Friday the result of its consumer survey in key markets in the period 20-24 May, finding a slight improvement of consumer sentiment in most markets compared to the survey held in the period of 30 April to 3 May.
- Loss or fear of job loss is typically the main driver of consumer sentiment, and in most key markets a significant share of consumers (40-60%) still believe that their job feels less secure because of Covid-19.
- A separate McKinsey survey among German consumers who before Covid-19 indicated to be interested to buy a new car, finds that currently 79% is now actively considering buying a car, up from 58% and 68% in early and mid-April, respectively.
- In Italy vehicle purchasing intentions among interested consumers increased to 75% (up from 48%), in France they increased to 89% (up from 54%), but in UK they fell to 60% (down from 64%).