SINGAPORE -- More than 70% of multinational companies operating in Asia expect revenues to decline this year due to the new coronavirus outbreak, a new survey released Wednesday found, illustrating the regionwide impact of the disease on businesses. Nearly 40% of the companies are already changing their business plans for the rest of the year, including measures such as reshuffling supply chains and cutting jobs.
The online survey was conducted from Feb. 12 to 18 by the American Chamber of Commerce in Singapore, an international business association that represents 600 companies that have any link to the U.S., including foreign companies with U.S. interests, and the public relations consultancy Sandpiper Communications.
As of Wednesday, the COVID-19 virus had killed 2,700 people, with 80,000 infection cases reported globally. Businesses have been hit hard, disrupting supply chains and affecting consumer and investor sentiment.
According to the survey, which drew 225 responses from various industries -- mostly multinational companies -- 38% of respondents said this year's revenues will drop 1% to 10% from last year, while 20% said a range of 11% to 20%, and 14% said more than 20%.
On the other hand, 27% of respondents said the coronavirus impact would be "negligible or no impact at all," and 2% expected an upside.
Companies in the travel industry have been impacted most, with 94% expecting revenue drops and 50% expecting them to exceed 20%. Many large-scale events and meetings were canceled or postponed, while companies have banned employees from traveling, dampening demand for the sector.
Most manufacturers also expect revenue declines, with 82% in the sector anticipating the outcome. Many manufacturers in the region are entrenched in Chinese supply chains, and so may face product delivery delays due to temporary factory shutdowns in China.
In contrast, 9% of the health care industry expected an upside, as some companies are seen benefiting from the situation due to high demand for personal health care products.
While the majority of the member companies face the impact, 39% of them have already started to re-evaluate their business strategies for the rest of this year. Out of these companies, 28% said they were setting up or using alternative supply chains to reduce dependence on China, and 10% said they would resort to layoffs or pay cuts.