The relationship between the global supply chain and the world economy is complex and hard to understand.
But UNL Assistant Professor of supply chains Leon Xu tells KLIN News it’s based on two parts: supply and demand.
“That would be true for most of the industry sectors,” Xu says.
The professor says demand will have a significant drops in airlines, cars and overall spending. Supplies in raw materials are low since factories in China are slowly reopening.
“This is a long process. Any impact will delay the effects, but I’m sure we will see some of the impacts in a week or two.”
Xu says the COVID-19 effects would also be similar to pharmaceutical supply chains. Some industries like cleaning supplies and medical equipment are booming with the influx of cash.
“The financial markets respond quicker compared to the physical industry because in the physical industry you have limitations like delivering goods from one place to another.”
The professor says manufacturing, however, is taking a hit worldwide with sites closed or slowly reopening.
Xu added it takes a longer amount of time for goods to cross the ocean versus the exchange of stocks.