|
|
|
|
Research and Compare Hundreds of
CD-Type, Fixed and |
Questions?
Give us a Call |
|
|
| ||||||||||||
|
Global Economic Cost of SARSMost people understand that Severe Acute Respiratory Syndrome (SARS) is a serious medical problem, but few people could have predicted the dramatic effect that it is having on the global economy.Forecasts of lost economic output in 2003 due to SARS range from $2.2 billion in China, where the virus is thought to have emerged, to $15 million in Vietnam, a country that has been credited for quickly containing the disease within its borders. All told, SARS could produce a total economic loss exceeding $10 billion in 2003.1 Home Front According to the Federal Reserve, officials in San Francisco and Dallas have already noted a drop in travel related to SARS.2 So have Chinatowns across the nation, where tourism-dependent businesses — already suffering from the slow economy — say customer traffic is off by 60 percent.3 It’s not surprising that the travel industry is on the front line of the SARS fallout, but the damage is reaching beyond airlines, hoteliers, and restaurants. In filings with the Securities and Exchange Commission in April, more than 70 U.S. companies indicated SARS was a potential problem.4 It’s becoming a no-win situation for some industries. Demand for some goods and services is lagging in SARS countries, which affects U.S. companies that serve overseas customers. But in SARS countries where demand has not fallen, companies must decide whether to postpone travel, which could result in lost business, revenue shortfalls, and layoffs. If the companies send personnel overseas, they may have to quarantine the personnel upon their return and lose 10 days of productivity, the recommended quarantine period. If the supply of goods and parts produced in SARS-affected nations begins to dwindle, U.S. factories and retailers may be forced to rethink how they operate. One study found that half of all electronic parts made in Asia are shipped via passenger jets, which are subject to cuts related to SARS.5 China is responsible for a tremendous amount of goods sold in the United States: 64 percent of footwear, 64 percent of toys, 63 percent of household goods, and 54 percent of stereo equipment.6 News reports indicate many people in Beijing have stopped going to work because of the outbreak. When a Plan Comes Together Although the SARS epidemic is a major news headline right now, keep in mind that the world often marks time by the disasters that fill daily newscasts. Before SARS, there was the war in Iraq, corporate malfeasance, the Beltway sniper attacks, anthrax, the war in Afghanistan, and so on. Something will always be hanging over the global and U.S. economies, threatening growth and prosperity. The SARS outbreak is just the latest reminder that a diversified investment portfolio is a critical element in your financial plan.7 1) The Wall Street Journal, April 21, 2003 2) Federal Reserve Board, April 2003 3, 4, 6) USA Today, April 24–25, 2002 5) Yahoo! Finance Singapore, April 24, 2003 7) Diversification does not guarantee against loss; it is a method used to help manage investment risk. © 2002 Emerald Publications
|
Send email to
webmaster@annuityadvantage.com with
questions or comments about this web site.
|
|
