Lazarov, Darko (2020) Analysis of the effects on the metal processing, electric, machinery and automotive industry from the health-economic crisis caused by the Covid-19 pandemic. [Project]
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Abstract
The rise and outbreak of the COVID-19 virus has created severe problems for the world economy. The issues are both on the supply and the demand side. Namely, in conditions of a global production system, where the supply chains are dispersed in many locations around the world, the closed borders and the difficult movement of goods have caused interruptions in production connections and temporary disruption of the production. As an import-dependent country whose output is mostly determined by imports of raw materials, it felt this immediately, especially in several sectors and industries such as the machinery, electrical, and automotive industries that are practically dependent on production components and parts from China.
Another important fact is that the health crisis has caused a temporary halt for most of the companies' production processes in the analyzed sectors in March and April. Also, the imposed emergency circumstances forced the companies to reorganize their production processes so that they can protect their employees' health, which, on the other hand severely reduced the utilization of production facilities in the recent months.
Also, most foreign companies in the automotive industry inside and outside the TIR zones are an integral part of the world's major corporations, which means that slowing and shutting down the corporate's production activity as a result of the global crisis has already affected their operations. The duration of this process will largely depend on how quickly the automotive industry will stabilize worldwide. But companies from the metal-processing, machinery and electrical industries will not avoid the effects of the crisis. Namely, most of them are export-oriented, which means that the slowdown in foreign demand will cause a downturn in their exports, which will automatically reduce their revenues.
Official statistics for the industrial production and exports in March confirmed the expectations for a serious slowdown in production and economic activity in the analyzed sectors. Specifically, in March, there was a decline in industrial production by 14.3%, while the decline in exports was even more significant with 26.8%. The worrying factor is that except for the metal processing industry, where the industrial production grew in March, all other sectors fell sharply. These negative trends will only intensify in the coming period since all expectations say that these sectors will be most affected in the next two quarters of the year.
Having in mind that these sectors have a significant economic impact on the Macedonian economy, it points out that the preparation of such a study is crucial in quantifying the consequences of the crisis and defining policy proposals aimed at mitigating the negative effects on these sectors.
The main purpose of the analysis is to assess the negative effects and consequences of the health and economic crisis caused by the COVID-19 virus on the metal processing, machinery, electrical and automotive industries. Additionally, to study their importance to the Macedonian economy and to define proposed measures to deal effortlessly and effectively with the crisis, to lessen the negative effects in these sectors, which would also reduce the impact on the entire economy.
The use of different methods and techniques for the analysis will lead to the accomplishment of this goal. The first thing will be to systematize the international experiences related to trends and conditions in the analyzed industries, in the context of the global crisis we are witnessing today. This way, we will provide a useful basis for assessing the effects in our country, given the fact that these sectors are strongly export-oriented and primarily determined by developments in global markets.
Secondly, a comprehensive sector analysis will be conducted for the period before the outbreak of the crisis, to quantify the importance of the analyzed sectors for the national economy. It is extremely important to prepare a more accurate assessment of how the effects of the crisis on these sectors will reflect the Macedonian economy in the period ahead.
Thirdly, a study survey of the representative companies from the analyzed sectors will investigate the conditions and problems faced by companies in this period, the effects of the crisis on their operations, and whether they are satisfied with the government's measures. It will also analyze the possible proposed measures which may reduce the negative effects of the crisis on their operations.
Fourth, to deepen the survey, several representatives of the most important companies from each analyzed sector and industry will be interviewed to discuss the current situation in their industries. It will analyze the effects of the crisis and what they are doing to overcome this period, including their expectations for the course of events in the future.
| Item Type: | Project |
|---|---|
| Subjects: | Social Sciences > Economics and business |
| Divisions: | Faculty of Economics |
| Depositing User: | Darko Lazarov |
| Date Deposited: | 07 Feb 2021 13:17 |
| Last Modified: | 07 Feb 2021 13:17 |
| URI: | https://eprints.ugd.edu.mk/id/eprint/27621 |
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