Last week, stock markets around the globe plunged as the epidemic in several Chinese cities spread beyond the world’s second largest economy and into other countries.
Shares in Shanghai continued to drop nearly ten per cent this morning, despite The People’s Bank of China announcing a £130bn stimulus package over the weekend, although European markets seem to have rebounded as the UK and others reported their first infected cases.
However, a growing list of global firms have shut stores, suspended factory lines, cancelled services or ordered staff to work at home in a bid to contain the threat.
In addition, global businesses face their own comms tests as they seek to reassure consumers and shareholders.
Psychological impact on trade
Kevin Craig, founder and CEO of PLMR, said history shows the markets will recover and that open and honest communication from the private sector helps boost long-term confidence.
"It is important to remember that China has faced a similar crisis before, when an outbreak of SARS in 2003 spread to 26 countries and sadly killed over 800 people. There were similar concerns about the global economic impact then, too, but in reality China’s growth rebounded quickly and the decline in consumer spending wore off fast.
"And this is exactly what Western businesses should be telling their investors. Fear drives both consumer and shareholder behaviour, so the most important thing is to communicate that there are robust plans in place to insulate businesses against these kinds of unexpected shocks, and that history shows that the markets will recover. A US-China trade deal, if and when secured, would also have a positive psychological impact and bolster business activity."
"It is already clear that travel, and industries dependent on the international transport of goods, are feeling the immediate brunt in reduced output and increased costs," said Chris Gilmour, director at Beattie.
"The biggest challenge I'm seeing is the limited information coming out of China. Combined with the unprecedented nature of this strain of the virus, there is simply no way to accurately predict what's going to happen next.
"You can put in place a number of continuity planning measures, but these are a shot in the dark with information flow so limited. And no-one wants to upset Chinese customers or suppliers by being openly critical of their government.
"It could simply fizzle out and next week we'll all be wondering what the fuss was - or it could be armageddon. The most likely scenario is probably somewhere in between, so businesses need to demonstrate that they are watching carefully and have contingencies in place."
Gilmour called for calm heads, as stock markets do not respond well to volatility.
Headland co-founder Neil Hedges agreed: "As I see it, companies affected must sit tight and ride it out. Some may take comfort from the fact that tourism has tended to bounce back quite quickly when previous virus crises have occurred."