Dun & Bradstreet estimates that the economic damage to Israel from swine flu could amount to NIS 35 billion. The direct damage is this coming winter is estimated at NIS 3 million.
A general contagion will, according to Dun & Bradstreet, lead to a 4-5% drop in GDP, amounting to NIS 28-35 billion, in Israel, and a 3-5% drop in global GDP. The main sectors likely to be affected are: entertainment, restaurants, bars, cafés, and tourism. There will also be gainers. The biggest will probably be drug companies that produce inoculations against the virus. Take away food and film hire companies also stand to benefit.
The calculation of the direct damage includes the direct cost of expected lost working days, damage to certain specific industries, and the cost of treating the sick.
Each year during the flu season, about 9% of the workforce take leave from work, and about two million working days are lost, costing about NIS 1.2 billion (including medical costs).
The Ministry of Health estimates that a quarter of the population will contract swine flu this winter. Dun & Bradstreet estimates that the number of working days lost will be 2.5 times the usual number, since the age group most at risk is those aged 15-49, so that the effect of the flue will be worse than in a normal season. Parents with sick children will stay at home, risking catching the flu themselves, while workers who present initial symptoms will take sick leave as a precaution.
This means that the cost of lost working days and medical treatment is liable to reach NIS 3 billion. In addition, some workplaces will have to isolate healthy workers, for fear of them becoming ill, which would result in a shut down of the office or factory. It is possible that whole geographic areas will be sealed off.
GlaxoSmithKline, the world's second largest pharmaceuticals company, projects revenue of $4.9 billion from the sale of medicines and inoculations against swine flu. The company sells anti-viral treatment Relenza.
Israeli company BiondVax has so far proved a big winner from swine flu anxiety. The company, which is developing a universal anti-viral treatment, has seen its share price rise 2,350% so far this year.
Published by Globes [online], Israel business news - www.globes.co.il - on August 10, 2009
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