As part of our ongoing efforts to provide you with relevant and important market information, please find an update from Knight Frank regarding the Coronavirus.
The K-shaped recovery
Most advanced economies will emerge from the coronavirus crisis with little lasting damage thanks to the swift rollout of the vaccines and huge increases in public spending, according to the IMF (full report and FT write up).
That makes the impact of the pandemic markedly different to the 2007/8 global financial crisis, after which economies emerged about 10% smaller than they would otherwise have been. A global expansion of 6% this year and 4.4% in 2022 will leave output in advanced economies just 1% smaller than their pre pandemic growth path by 2024.
There is still a lot of uncertainty and variation behind the forecasts. Emerging economies excluding China will remain 8% below their pre-pandemic growth path due to weak finances, poor access to vaccines and reliance on tourism. However, it is the long-term growth prospects of China and the US that really catch eye. China's economy, which surpassed its pre-pandemic growth trajectory back in 2020, will contribute more than a fifth of the total increase in world GDP by 2026, followed by the US with almost 15% - Bloomberg has the chart.
Google and Amazon are the latest large companies to shun remote work, with Google going as far as telling staff to seek approval if they wish to work remotely more than 14 days a year. That follows a recent study from KPMG suggesting CEOs globally are cooling on the idea of cutting back on office space.
This is all interesting, but the debate over remote work and the future of the office has morphed into a much broader conversation about working habits and conditions. Some of this was prompted by stories of burnout among junior employees at professional services firms and investment banks for whom remote work means few opportunities to log off.
As a result, companies are looking beyond just the number of days a week staff can or should work from home. See PWC allowing staff to choose when they start and finish work, KPMG testing a rainbow meeting system to combat zoom fatigue or the more than one million companies that may switch to a four-day working week as a result of the pandemic. Incentive systems that impact workplace culture are also coming under increased scrutiny - see the FT's sharp criticism of forced employee ranking yesterday.