V-U-L-nerability: How will we emerge from the Great Lockdown?

KPMG reviews the path for the economy from the impact of COVID-19.

June 3, 2020

Please download the latest chart book, V-U-L-nerability: How will we emerge from the Great Lockdown?

  • COVID-19 has exposed vulnerabilities in our economic, social, and health systems.
  • Economic outcomes vary, but most economies are likely to see GDP declines in Q2 that dwarf the slowdown experienced during the global financial crisis. China saw this in Q1.
  • The ability to recover and return to previous growth levels is highly dependent on health, economic, and public policymaking; countries with strong health care systems and a willingness to transcend policy differences have so far seen better economic outcomes.
  • Many industries will be forever changed by shifts to digital modes of operating during COVID-19.
  • Supply chains are likely to be optimized for redundancy and resiliency rather than purely based on economic efficiency.
  • U.S. growth will likely take until 2021 to be positive on a year-over-year basis and until after 2024 to reach 2019 levels.

KPMG’s Office of the Chief Economist is continuously monitoring key developments in this unprecedented situation and refinements to the economic model occur daily. To learn about our current scenario analysis, including deep background on the underlying cause and effect dynamics, please download our latest report, V-U-L-nerability: How will we emerge from the Great Lockdown?

Due to the rapidly evolving nature of this situation, we update this analysis frequently. Please check back often for our latest report.


Constance L  Hunter

Constance L Hunter

Chief Economist, KPMG US

+1 212-954-3396

Research highlights 

Explore key findings from our latest economic analysis

Peak to trough GDP declines of historic proportions

Peak to trough GDP declines of historic proportions

  • From the peak in Q4 2019 to the trough, likely in Q2 2020, the U.S. economy will have contracted by just over 12%, significantly more than during the global financial crisis where GDP declined 3.9% peak to trough.
  • This is comparable to the 1944 recession where the peak to trough decline was 12.8%, but not nearly as bad as the Great Depression which saw a 26.6% decline in GDP on a peak to trough basis.
  • While this episode is expected to be severe, we anticipate GDP will be positive in 2021 on a year-over-year basis as the combination of medical advancements and improved testing and tracing allow for more normal economic activity.

Leisure and hospitality most impacted, no sector unscathed

Leisure and hospitality most impacted, no sector unscathed

  • Leisure and hospitality lost 7.7m jobs in April (41% of private job losses), the bulk of which were in accommodation and food services.
  • Industries that were remote enabled and less directly impacted by lockdowns, including professional services, information, and financial activities, experienced smaller declines representing less than 6% of total job losses.
  • The disparity among those who have lost jobs and those who have not splits along income, education, and racial lines.

Financial factors impacting industry vulnerability

Financial factors impacting industry vulnerability
  • Industries which struggle to recover from COVID-19 due to a combination of lower demand offerings, insufficient capital, and high debt will likely experience a hard reset to their businesses.
  • Some firms are poised to surge despite the overall adverse operating conditions. These firms have strong balance sheets and can capitalize on consumer behavior that has been altered during the crisis.
  • Most firms need to transform in order to emerge from the Great Lockdown in a position that allows them to thrive and operate effectively in what is likely to be an altered landscape.


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