The investment trends accelerated by Covid-19

social distancing

The Covid-19 outbreak is likely to change the way we think, work and live. It is accelerating trends that were already in place and changing people’s behaviour. All of this has implications for investors. Here we look at some of the long-term consequence of the ongoing pandemic.

Creating jobs by de-carbonising the economy

Creating jobs will be a priority for governments in a post-infection world – and investment in green energy and other de-carbonisation measures will increase. The European Union has confirmed that it sees green growth as its prime objective and investment in clean energy will help with the recovery. UK Chancellor Rishi Sunak also earmarked £3bn to create green jobs and improve the energy efficiency of public buildings. In the US, Donald Trump and the Republican Party are not so keen on environmental issues – and the administration wants to boost production of US coal. However, Democrat Presidential candidate Joe Biden uses the same language as the EU, offering a big ‘Green Deal’. He is currently leading in the polls and if he wins the White House in November this trend will receive a further boost.

Surging e-commerce

The high street was already in trouble before the pandemic, as business rates and rent are a significant fixed cost. Customers on the internet also do most of the work usually done by a shop assistant in a physical store. Lockdown has increased the addressable market of online companies, as people previously reticent about buying goods on the internet turned to internet shopping as their only alternative. This trend will continue after lockdown and retail businesses without an efficient online alternative will continue to suffer, benefiting the e-commerce giants. More weak retail chains will go bankrupt, and more will decide on a substantial slimming down of their shop estate.

View Full Article – published by Charles Stanley on 30th July 2020