By Elisabeth Buchwald
Before the omicron variant of the virus that causes COVID-19 emerged, global supply chains were hanging by a thread due to labor shortages, factory shutdowns and elevated demand for goods, especially leading up to the holiday season.
Now omicron, which the World Health Organization has deemed a “variant of concern,” is making that thread even thinner.
Early evidence suggests that omicron may be more transmissible than the delta variant, but it’s unclear yet whether it causes more severe cases of COVID-19 than other variants.
Moderna /zigman2/quotes/205619834/composite MRNA -3.03% CEO Stéphane Bancel cast doubt that the vaccines in use will adequately protect vaccinated individuals from omicron. “There is no world, I think, where [the effectiveness] is the same level . . . we had with [the] delta [variant],” he said in an interview with the Financial Times published Tuesday.
Meanwhile, BioNTech /zigman2/quotes/214419716/composite BNTX +3.65% CEO and co-founder Dr. Ugur Sahin said that vaccinated people will likely remain protected against severe cases of COVID-19, including those caused by the omicron variant.
“Our message is: Don’t freak out, the plan remains the same: Speed up the administration of a third booster shot,” Sahin, who helped develop one of the earliest COVID-19 vaccines with Pfizer /zigman2/quotes/202877789/composite PFE +1.92% , said in an interview with the Wall Street Journal on Tuesday.
Either way, global supply chains won’t benefit from omicron, experts have said.
Federal Reserve Chairman Jerome Powell said that “greater concerns” about COVID-19 stemming from the new variant “could reduce people’s willingness to work in person.”
That “would slow progress in the labor market and intensify supply-chain disruptions,” Powell said Tuesday in prepared remarks he delivered for the Senate Banking Committee.
Mark Zandi, chief economist at Moody’s Analytics /zigman2/quotes/202808835/composite MCO -5.52% , said that supply-chain disruptions due to omicron — or any other new variants that arise — will disrupt global supply chains “but likely not to the same degree as the delta wave.”
“Given the experience of delta, factories, ports, shippers and trucking companies know where the bottlenecks in the supply chain are most serious, and will thus be able to more gracefully work around them in the next wave of the virus,” Zandi, whose research is frequently cited by President Joe Biden, told MarketWatch.
Zandi also pointed out that “in response to the supply-chain chaos created by delta, businesses throughout the chain are aggressively investing in new equipment and software, which should reap some benefits in future waves.”
But “concerns about supply-chain issues are valid given fear of the new variant is already restricting travel,” Chris Low, chief economist at FHN Financial, said in a note.
Travel to the U.S. is restricted from South Africa, where the variant may have originated, and seven other countries. But the restriction doesn’t apply to U.S. citizens or current residents.
Will your Black Friday or Cyber Monday purchases be delayed?
This year, many consumers started shopping for the holidays well before Black Friday and Cyber Monday — heeding retailers’ warnings that supply-chain issues could lead to shortages of popular toys, tech and other goods produced overseas.
That helps explain why Black Friday and Cyber Monday online sales were slightly lower than last year, according to data compiled by the Adobe /zigman2/quotes/200389143/composite ADBE -3.26% Digital Economy Index.
“It’s kind of been like Cyber Monday since early October,” said Alla Valente, a senior analyst at Forrester /zigman2/quotes/207174958/composite FORR -2.25% . “And with more online shopping there are more goods to deliver via strained logistics channels, port build-up and labor shortages.”
So if you waited until Cyber Monday to make holiday purchases, you were already less likely to receive your goods on time. But omicron could mean an even longer wait.
“It will drive even more consumers to online channels, and continue to disrupt supply chains,” Valente said.