Make no mistake, there’s a cash crunch a-coming. While governments around the world have done their best to provide relief to both businesses and people the extent to which they can continue providing unfettered assistance is limited.
In the UK for example, we have seen the government go from pretty much funding its citizens and businesses through a variety of schemes to a situation where business has to at least partially fund furloughed workers. In addition selective extended restrictions are playing havoc in some regions where some cities are operating on a stop-start basis. That adds cost at a time when it’s nigh on impossible to think of raising prices.
To get a sense of what this looks like, data published by Xero provides a picture of how the pandemic has impacted business activity – see below:
For another view, consider this graph from the