The greatest challenge during the covid-19 pandemic is a people one. Not only in the spread of cases, for which the industry is strongly advocating more testing (43%), but in the impact on workforces globally. Maintaining workforces is a key concern for the industry and wage support far exceeds any other form of government assistance in this pandemic (70%).
However, we are already starting to see some stabilisation in expectations. As seen in stock markets around the world, an initial dive in sentiment has stabilised somewhat. While concern is justifiably high (60%), the change in concern has for the first time settled, 40% report no change in sentiment, up from 13% last week.
In our second week of research, only 3% of the industry saw a sustainable future for their business, now 30% do. The volatility in these results is a testament both to the incredible uncertainty regarding this crisis, as well as the effective business continuity work being conducted across the industry. Resources industries are adapting to the situation quickly, with promising results.
On the State of Play covid-19 research
Given the unprecedented situation, we at State of Play are looking to use our resources in partnership with the Australian Federal Government through METS Ignited and National Energy Resources Australia (NERA) to help the global resources industry understand how different businesses are responding by providing a useful source of data and support collaboration in response to the crisis. We aim to do this by providing headline, geographical, site-based data to help decision-makers take the pulse of the industry response. This data is directly used to inform government policy in Australia, both in understanding the needs of the local industry and to compare the sector to international benchmarks.
We are conducting research on a week-to-week basis to measure the shifts in attitude and ensure currency of recent data. We will also use this data to conduct further research on how to best prepare and respond for future crises of this nature. We are happy to share the data with researchers and analysts; just send us an email request and we will provide a cleansed dataset.
In its simplest form, the data reinforces the anecdotal evidence of how the industry is responding. In every continent, every industry, every place of work, covid-19 is a big driver of disruption and change. Companies are responding with a range of measures, from travel restrictions, screening, remote work, new policies and risk management and closure of sites. The full data pack is available for download at the top of this article. Some of the most interesting insights come not from the headline data but in the breakdown of different demographics in their evaluation of the crisis and response
Adapting, for the better?
The current adversity is demanding change from the resources industry; inevitably some change will be permanent. Flexible work options are seen as the most likely to be permanent, 87% of the industry expect the upgraded technical infrastructure and a cultural shift to accommodate the pandemic’s impact to sustain new ways of working as an industry norm.
A key concern of the industry and governments alike is the resilience of global supply chains. As the crisis continues, critical shortages of key components are having a big impact on operating and services companies alike, which for two thirds of the industry reinforces the importance of the resilience premium of local procurement, up from just 27% last week, and inventories (30% up from 10% last week).
Government stepping in
Globally, governments are stepping in to shore up local economies and support industries particularly hard hit. There are two facets of government support, each essential to the recovery in their own right. First is relieving pressure on balance sheets through wage support (70%) and corporate tax relief (40%). In particular, businesses with marginal assets or cashflow pressure are able to focus on adaption rather than simply survival.
The second option is stimulating the broader economy. At a basic level, the health of the global economy relies to some extent on sentiment. To this extent, transparency and information is important, with more testing (47%) and information sharing (27%) seen as key policies for the government to assist the global resources industry. More broadly, maintaining and stimulating demand, either through maintaining trade flows (37%) or infrastructure demand (20%), indirectly impacts the cashflow and growth options for the industry. Thus, government policy is likely to be successful in combining direct assistance through cash injections and indirect support through stimulating demand in the global and domestic economies.
As this pandemic continues to evolve and businesses respond to the dynamic environment, we at State of Play want to provide as much valuable data back to the industry as possible to help guide the response. We are now launching our Week 4 survey, with some different questions and some that remain constant to track change over time. Even if you completed the survey previously, please complete it again here and share. Thank you and stay safe!
The State of Play Team