The virus, due to the low incidence of chronic diseases and better hospital facilities, has less directly affected the Japanese economy. Japan should also benefit from the resilience of the Chinese economy, which remains a major economic partner. The decline in GDP should be less pronounced than in Europe, in the order of -5 to -6% according to the consensus and the IMF. The Japanese authorities have also launched a major support plan, in addition to a plan already in place prior to the health crisis. Nevertheless, the decline in GDP in the second quarter is expected to be deep, at -9.2% according to the Factset consensus.
In China, the plague has been properly controlled in the context of a more authoritarian country. Despite the resurgence of outbreaks, particularly in Beijing, and new containment measures, it seems that the epidemic risk is decreasing. Both local and national authorities have proven their effectiveness. The negative impact on the economy has been significant, but the change in GDP remains positive: Chinese GDP is expected to grow by 1% in 2020, according to the IMF and the Facstet consensus. The decline occurred in the first quarter of 2020 (-6.8%), while GDP is already recovering in the second quarter (+1.8%). The measures taken to tackle the crisis, mainly monetary, have been successful.
Oil prices have recovered well. Now at $40-$45 a barrel vs. $50-$55 before the crisis, the price of oil has risen by nearly 50% from its March lows. The drop in the number of wells in the United States is significant, and the production restrictions decided by the producing countries have compensated for the fall in consumption. Consumption is evolving in line with the deconfinement measures taken in May and June. The prices of the main industrial raw materials have also recovered and are gradually returning to their pre-crisis levels. This is providing some relief to the often emerging producer countries, whose economic situation remains very worrying, especially Brazil, whose GDP is expected to fall by -9% in 2020, and by -8% in the second quarter of 2020.
The Group’s priorities in the first half of the year were affected by major events around the world. The health of employees was the first subject of mobilization with the Covid‑19 pandemic. The teams then focused on providing the best possible assistance to our clients, who faced the economic consequences of varying degrees of confinement across many countries. Finally, issues of diversity, inclusion and social justice have played an important role and generated strong internal mobilization.
The pandemic that spread from country to country at the end of January defined the Group’s top priority: to protect all employees, by following national confinement instructions and recommended barrier actions. Because of Covid‑19, 95% of the Group’s employees switched to remote working within a few days. Everyone was equipped in record time (laptop with VPN, mobile, etc.) thanks to the IT teams, who carried out a considerable amount of operational deployment and infrastructure monitoring work.
Every Sunday for three months, Arthur Sadoun, Chairman of the Directoire (Management Board), spoke by video to all the Group’s employees, explaining the priorities of the moment and indicating the challenges and next steps. This regular information, supplemented by local managers, enabled employees not to feel isolated and to be mobilized around the Group’s strategic and operational priorities. As soon as they were able to return to the office, local HR teams deployed highly structured recovery plans, taking care to give priority to remote working for as many people as possible and to organize the best possible management of the flow of people in the various sites. Employees have been equipped (masks, hydro-alcoholic gel, etc.) and the offices, once disinfected, have been refurbished to respect social distancing, with reinforced health precautions.
At the same time, on the strength of the successful test year in the United Kingdom, the accelerated and anticipated deployment of the Marcel platform took place in almost all countries during the second quarter. Employees were able to stay connected to the Group’s news and access the library of online training courses accessible to all 24/7 – Marcel Classes – and via hundreds of modules, to improve their skills and discover new business developments or listen to inspirational personalities. Also on Marcel, they were able to benefit from individual support programs to take care of their physical and mental health. Finally, as the pandemic has hit some customers and activities hard, Marcel has enabled employees who are more available to help other teams who are particularly in demand. A more dynamic management of talents and skills started during the health crisis.
Issues of equality and inclusion, anti-racism and social justice took centre stage in the United States and many other countries in the second quarter. June 17 was a “pause” for US agency employees and their managers to reflect on how to move forward and be more effective in promoting inclusion in our agencies and in society. The Diversity and Inclusion teams and the Chief Talent Officers coordinated the work, and strong commitments were made, under the responsibility of the US Executive Committee, on seven measures to promote real inclusion that have an impact on our agencies and communities. Other countries, such as the United Kingdom, have mobilised internally to strengthen their internal and local actions.
