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Manufacturers fare better than many service providers in COVID-19 economy
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The coronavirus has dealt a savage blow to the world economy, idling workers and bankrupting businesses around the globe.
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But months into the crisis, a clear divide between survivors and casualties is emerging. Countries, workers and industries that rely on making stuff — from computers to furniture to toys — are getting by, or even thriving, amid the economic maelstrom.
Meanwhile, those who provide the sort of face-to-face services that people avoid out of fear of infection — traveling, eating out, going to the movies and some child care — are struggling. Services that don't require physical proximity — such as many financial services, software and telecommunications — have been less badly hit, as have construction and farming.
This divide between manufacturing and services means the pain has fallen especially heavily on female and immigrant workers and on economies with large informal sectors or with heavy exposure to tourism, entertainment and travel.
That divide is especially alarming given this autumn's spike in infections in much of the West, suggesting workers, companies and countries reliant on services face a long, painful recovery that may only arrive when a Covid-19 vaccine comes into widespread use.
According to growth forecasts by the International Monetary Fund, the world's economies are diverging this year more sharply than ever before. Much of the difference seems to come down to the economic structure countries had going into the crisis, rather than their handling of the virus.
Manufacturing and export-heavy economies in Asia have performed well, while those with large tourism sectors have suffered, even where the pandemic had been brought under control.
For instance, Thailand has reported just a handful of local cases in the past three months, but relies heavily on tourism and has suffered. Taiwan, on the other hand, is a major exporter of computer components and electrical machinery.
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