How did the business investment landscape change during COVID-19?
Updated: Dec 3, 2022
Some of the long-term business implications of the impact of COVID-19 are beginning to become clear. Business investment suffered a very short-term decline in the first half of 2020, but then recovered - or more precisely, some categories of business investment came back; others not so much. Unfortunately, the prospects for these sectors look weak in the coming years for businesses and workers involved in these types of investments. Structure - Investments in all types of structures fell during the pandemic and have continued to remain low. Commercial and health structures appear to have suffered the least decline among the major categories. However, there was a significant decrease in office structures (20% decrease), entertainment centers (31% decrease) and coffee bars, restaurants (33% decrease). Rapid growth in the construction of inventory space to increase storage capabilities offset the decline in other categories. The truth is that, with the increase in the number of companies that offer remote work, there is a decrease in the demand for office space, and construction is reacting to this phenomenon. Manufacturing equipment - Investment in equipment fell by 14% in the first half of 2020, but a good part recovered during the following year. However, not all types of investment in production equipment fell in the first half of 2020. Purchases of information processing equipment, for example, increased even in the second quarter of 2020, when almost every other economic sector declined. This growth reflects the immediate need for such devices as companies focus on building the infrastructure needed for remote work.
Intellectual Property- Investment in intellectual property took a hit in the second quarter of 2020 and then returned to the same levels. Through Q3 2021, investment in intellectual property increased by 8% above the pre-pandemic level. This was largely the result of very rapid investment in software, the largest category of intellectual property investment. This is the first article in a series of articles that will aim to provide an overview of the performance of various industries during an unprecedented period such as that of COVID19. This period will be an important indicator for various industries - how they will operate and develop in the years to come. VIN Invest