Dear readers,

The COVID-19 pandemic has impacted every sector of society and the economy, putting the most vulnerable at risk, bringing severe strains on health systems, impacting livelihoods and severely restricting economic activity.

According to the six-country study, COVID-19 Mindset: How Pandemic Times Are Shaping Global Consumers conducted by FleishmanHillard’s TRUE Global Intelligence, nearly everyone has felt the impact of COVID-19 on their lives. Without any doubt, coronavirus has already affected and reshaped customer behaviour. But how has the COVID-19 Crisis impacted the TIC Sector so far? Bennet Summers and Henry Charrington from OC&C presented their findings during the TIC Council Webinar on April 14, 2020, and then a refreshed view in July 2020.

According to the market overview presented by OC&C, the TIC market has performed strongly since 2017, with underlying growth of +9% per annum. However, since the outbreak of COVID-19, the market is experiencing a ‘peak of uncertainty’ with recent forecasts on global GDP growth impact ranging from -2% to -7%.

The impact on TIC markets has varied by each industry sectors’ level of resilience. For example, the level of disruption for oil & gas, and aerospace industries (where demand and production drivers have been negatively impacted) differs to that of food, agriculture, and pharma (where demand has been resilient or even picked up). The impact has been particularly acutely felt in sectors that have highly distributed global supply chains for goods and specialised workforces. Subsequently, remote and digital testing has been rapidly adopted by TIC players, and their customers, to ensure they can continue to provide their services.

Overall, the TIC sector has been resilient in the face of this crisis – despite operating constraints and customer challenges – but some sectors have been particularly hit by the economic downturn. Survey results indicate that revenues for TIC have seen, on average, a “moderate” impact (e.g., a 5,20% fall in H1) but with high variation in sub-sectors due to their end-market exposure.

In this regard, flexibility in capacity is key for TIC players, as private labs have been central to expanding COVID-19 testing capacity in countries with the most aggressive responses. For example, Germany and South Korea’s testing response have been taking advantage of outsourced testing infrastructure since January and February 2020 respectively. Furthermore, TIC providers have been swift to develop and integrate in their activities new types of services and delivery models in order to smartly access latent demand: examples include remotely-performed services, enhanced digitalization, increased automation, diversification of supply chains.

Many believe that the pandemic will result in lasting change in terms of economic activity and society as a whole. This means that we need to keep in mind the importance of strategic planning, which is critical to face and survive the deep structural shifts that are likely to be accelerated as we emerge from the COVID-19 crisis. With operational disruptions predicted for certain TIC industry sectors for the next 12 months and beyond, it is imperative to understand the tasks at hand, to adapt and overcome these uncertain times, as the virus will continue to define much of the sector’s activity for the foreseeable future.

In this context, the TIC sector will become more important than ever in its role to verify the safety of products, enabling trade and protecting brands while helping society to navigate the new “normality” in the aftermath of the pandemic.