Your iPhone, television and video game console were likely made in China where the deadly coronavirus is shuttering business operations as scientists race to find a cure.
Apple, LG and Amazon are just a few of the household names that are taking measures to protect local workers and business travelers from the deadly outbreak which seemingly began in the central city of Wuhan. As a result, China’s manufacturing output is being delayed in ways that will become more pressing as time goes on.
Consumer electronics isn’t the only sector being rattled by the outbreak that has killed over a thousand people and sickened thousands of others worldwide.
Airlines have largely restricted travel into and out of China, curtailing tourism. Restaurants and theme parks have temporarily closed-down, resulting in thousands of idle workers. And clothing retailers have modified operating hours, impacting their outlook for the quarter ahead.
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Congress said on Tuesday that it is “closely monitoring” the outbreak as it may cause disruptions “that could spill over to the rest of the global economy.”
In the meantime, information about how the coronavirus is impacting businesses has trickled out through earnings calls, press releases and public service announcements. Here’s what we know so far about how the widespread respiratory illness is shaking the business world.
Federal Reserve Chairman Jerome Powell warned lawmakers that the coronavirus could pose broader economic risks down the line on Tuesday. However, he doubled down on the central bank’s decision to hold short-term interest rates steady citing strong job growth.
“There likely will be some effects on the U.S.,” Powell told the House Financial Services Committee. “We are closely monitoring the emergence of the coronavirus.”
Mobile World Congress
The world’s biggest mobile tradeshow is happening later this month, but some of its biggest attractions are backing out of the event as worry spreads about coronavirus.
Facebook, Sony and Amazon were among the tech giants to cancel ahead of the event taking place in Barcelona Feb. 24 – 27. Organizers issued a press release confirming that some large exhibitors have backed out of the show but it “remains more than 2,8000 exhibitors strong.”
The organization issued guidance in order to reduce coronavirus infections at the event, including a no-handshake policy and plans to swap out microphones between speakers.
Amazon reportedly emailed its suppliers to place last-minute orders of products made in China, Business Insider reports. The stockpile is meant to offset any upcoming supply chain stalemates. The e-commerce giant previously told Reuters that the coronavirus isn’t affecting its operations.FedEx and UPS have reportedly made flying to China voluntarily for flight crews.
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An Uber driver reportedly came in contact with coronavirus while driving a passenger from Los Angeles to Mexico, so the ride-hailing giant temporarily deactivated hundreds of customer accounts in the region to prevent the possible spread of the illness.
Airbnb is allowing some customers to cancel home reservations without charge if they were visiting areas severely impacted by the deadly disease.
Delta, United and American airlines have canceled flights to China in an effort to contain the virus.
Disney theme parks in Shanghai and Hong Kong are temporarily closed in “response to the prevention and control of the disease outbreak,” the company said. This comes at a time when Disney Resorts and Disneyland typically see strong attendance due to the Chinese New Year holiday that just ended.
The Walt Disney Company said in an earnings call that the outbreak will negatively impact its second-quarter and full-year results. The company projects that its Shanghai resort will lose $135 million and the Hong Kong Disneyland will lose $40 million if the parks are closed for two months.
Both Shenzhen-based Tencent and software giant Microsoft told CNN Business that employees are working from home for another week or so to prevent coronavirus from spreading.
Apple, which does a majority of its manufacturing in China, temporarily shut down all its stores in the country’s mainland earlier this month. It also shut down some of its corporate offices to contain the virus.
Industry analysts say consumers could start to see delayed deliveries if the virus isn’t contained in the coming weeks. TV manufacturers are also facing issues as five factories that produce parts for LCD and OLED panels produced for flat-panel TVs and computers. According to researcher IHS Markit, production could fall by between 10% and 20% percent this month.
Some automotive companies are starting to resume production, while others have restricted or banned travel to China outright.
Tesla reportedly reopened its Shanghai factory earlier this week, while General Motors is planning to reopen its Chinese assembly plants in the coming weeks. Toyota also delayed reopening its Chinese factories.
Research firm IHS Markit expects automakers to lose about 1.7 million vehicles due to stalled production because of coronavirus if conditions are deteriorated through March.
McDonald’s and Starbucks have closed hundreds of Chinese locations to keep employees and the public safe, while retailers like Nike have modified hours after seeing reduced foot traffic in the region.
Still, the fallout from coronavirus on clothing stores is minimized, at least initially, since February tends to be a light shipping month.
The athletic gear maker Under Armour warns that the outbreak is delaying shipments of fabric, packaging and other raw materials from China. It said the shortage will reduce its first-quarter revenue by up to $60 million.
Follow Dalvin Brown on Twitter: @Dalvin_Brown.