Part 1: The Impact of COVID Vaccines and Variants

Planning for 2022; A micro-webinar series to help you navigate what's next

Last Updated: December 21, 2021

Planning for 2022 is our end-of-year micro-webinar series that covers the two topics that will have the greatest impact on businesses in 2022. This first blog discusses how COVID will impact American businesses in the coming months and provides key insights for executives when planning for potential outcomes.

Despite the recent rise in COVID cases during the last few months, there is some reason to be optimistic about the direct impact of the virus in 2022. The vaccination rate in the U.S. is rising and the spread of COVID has fallen. But, the constant mutation of the virus, in addition to the speed of transmission, is proving that the global pandemic is far from over. This will have significant implications for U.S.-based companies in the next year.

The Good News –  Rising Vaccination Rates

To start with the good news, the vaccination rate is up in the U.S. as nearly ⅔ of Americans are fully vaccinated and ¾ have received at least one dose. The rising vaccination rates combined with increased natural immunity and breakthrough COVID treatments point to a diminishing impact of the pandemic on the economy. While there may be continuing shutdowns in certain cities, the U.S. economy as a whole has been largely immunized against a pandemic-related recession.

Cause for Concern – COVID Variants

While the widespread vaccination rates are a positive signal, not all businesses will be immune to the continuing effects of COVID. The rise of the Delta and Omicron variants has proven that this global pandemic is far from over. The Delta variant might have felt like an anomaly, but the recent global spread of Omicron has proven that Delta was not the last in what could be a long line of potentially destabilizing variants. While the direct impact on the U.S. should be mitigated by widespread vaccine adoption, that may not be the case for other countries and the global economy. Companies that rely on global trade or foreign demand for their products could face unforeseen risks if new variants arise.

How to Plan for the Potential Impact on the Supply Chain 

The greatest risk that the variants bring for businesses is further disruptions in the supply chain. Even though lockdowns remain unlikely in major U.S. cities, a number of countries around the world remain susceptible to new variants; especially China, whose zero-tolerance policy towards COVID has left the country with relatively lower levels of natural immunity. Given China’s continued importance in global supply chains, any lockdowns or work stoppages could worsen the global shortages and put further strain on consumer prices and inflation.

The first step to planning among COVID uncertainty is to understand the current challenges that your company is facing within the supply chain. If a specific country or geography may become heavily impacted by a variant, you need to identify any major impact or vulnerabilities this may cause your company. Moving forward, it’s critical to develop contingency plans for multiple plausible scenarios to ensure you are not blindsided in the event of a shutdown or further crisis.

Be sure to check out the second blog in this mini-series for more insights into planning for 2022, including an overview of shifting consumer behavior and expectations for consumer spending.

You can watch the micro-webinar on vaccines and variants, presented by Prevedere Senior Economist, Boyd Nash-Stacey, here.