News & Analysis
Covid-19 Executive Briefing
Understanding the economic impact of the Covid-19 pandemic and the implications for the defence sector
Powered by
- ECONOMIC IMPACT -
Latest update: 8 September 2020
Concern over the spread of Covid-19 remains volatile while business optimismis growing.
After weeks of gradual decline, GDP estimates for many countries have levelled off.
-3.9%
The current 2020 consensus forecast for GDP growth. Negative GDP growth is forecast in all countries except China.
-4.4%
Fitch Ratings revised its 2020 forecast for the global economic growth to -4.4% from the earlier -4.6%. estimate.
Impact of Covid-19 on employment
- Impact on M&A activity -
Since January, M&A volumes have fallen off a cliff
- The deals index shows the steepest decline since January 2020.
- No sector stands out, with volumes crashing across the board. Extensive lockdowns in major economies have made deal-making difficult.
- Business priorities have changed and this will impact acquirers' M&A strategy. Expect more investments in weak business areas highlighted by the Covid-19 crisis, e.g. digitalisation and cybersecurity.
- Well capitalised US and Chinese big tech firms will likely go on a spending spree in H2 2020. China's plans could be hindered due to increased scrutiny by regulators.
- Expect fewer deals over $1bn in the short term.
Business priorities have changed and this will impact acquirers' M&A strategy.
Expect more investments in weak business areas highlighted by COVID-19 crisis, such as digitalisation and cybersecurity.
Share this article
