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More Companies Concerned About Cyberattacks Than Natural Disasters

More technology companies are concerned about ransomware attacks than any other threat, shows a new risk report from Marsh. Forty-seven percent of respondents say that a cyberattack that shut down their operations or their suppliers would be a catastrophic threat to their company — more than double the response to that question only two years ago.

Another one-third of respondents say a ransomware attack leading to a data breach would be catastrophic. Data breaches are also considered risky, even if they aren’t catastrophic; 83% of respondents said threats to data security and privacy are the top risks to their company. Companies are also concerned about natural disasters and geopolitical events — the number of people who consider a trade war a significant risk is five times higher than two years ago.

As the conflict in Ukraine increases the likelihood of cyberattacks, companies, governments and organizations have had to tighten their cybersecurity protocols or risk substantial harm. The pandemic was also a driver of increased cybersecurity, as firms updated their security controls to account for employees working from home.

Americans’ Net Worth Increases at Record Pace

The vast majority of Americans are better off now than they were before the pandemic, but that wealth is distributed unevenly, writes financial economist D. Brian Blank.

Americans overall saw record gains in their personal finances, which increased by over $18 trillion in 2021, thanks in large part to government aid during the pandemic. Billionaires saw the greatest increase in their wealth, driven largely by gains in their stock holdings and businesses. The richest 1% saw their wealth increase by $6.7 trillion in 2021, while just $1.5 trillion went to the bottom 50% of Americans.

But the bottom half of Americans saw their wealth grow at the fastest pace, jumping by 64% in 2021 — the biggest calendar-year growth of any group since 1988. These changes were mostly due to gains in real estate assets, which increased in value faster than mortgage debts during the pandemic. Overall, this gain hasn’t changed the U.S. wealth gap: The bottom half of Americans owned 5.5% of the country’s assets before 2020, and at the end of 2021, they owned 5.9%. 

The increase in Americans’ net worth also hasn’t erased the racial wealth gap. Most of these income gains went to white Americans, whose net worth rose by $14.5 trillion. Black Americans gained $1.3 trillion, and Hispanic Americans gained $683 billion.

U.S. Jet Fuel Prices Rise Above $5/Gallon

American airlines are paying over $5/gallon for jet fuel as of April 2022, according to the U.S. Department of Transportation and the Energy Information Administration. U.S. carriers reported the average cost of fuel rose in March 2022 by over 64% since the same time last year. Prices have continued to rise as the conflict in Ukraine and sanctions against Russia push energy prices higher.

Fuel prices remained relatively consistent over the summer months of 2021, until a double-digit increase hit in October. The U.S. administration said it is keeping a close eye on prices that could threaten air travel recovery. High jet fuel prices around the world are being passed on to the consumer, slowing the potential recovery from the air travel slump during the pandemic.

Fuel is the second-highest cost for airlines after labor, and airlines typically offset fuel costs with higher fares. Despite higher fares and staffing shortages, demand for travel is surging, and airlines are preparing for another surge in the summer.

China’s COVID Shutdowns Disrupt Supply Chains

Source: Bloomberg

Global supply chains are experiencing disruptions for the second year in a row, due to a new wave of COVID-19 sweeping through China, reports Bloomberg. China’s zero-COVID policy restrictions have caused shipping, air freight, and trucking delays, setting back supply chains already reeling from the pandemic and Russia’s invasion of Ukraine.

Experts estimate that the ripple effects from the lockdowns and bottlenecks will extend throughout the year. Global trade started to rebound last year after its slump in 2020, but the conflict in Ukraine and now backlogs in China will lower trade volume and raise prices. China accounts for 12% of global trade.

Currently, it takes 111 days for cargo for goods to travel from Asia to the U.S., more than double the time it took in 2019. It takes even longer, 118 days, for goods to reach Europe from Asia, according to freight-forwarding company Flexport Inc.

In response, companies are considering shifting their supply chains out of Asia—79% of CEOs are planning to or have already moved part of their manufacturing from China to the U.S.

Ukraine Crisis Sets Back Europe’s Economy

The conflict in Ukraine is taking its worst toll in human lives, but it will also set back Europe’s economic recovery from the pandemic, the International Monetary Fund reports. Rising inflation, spiking energy and food prices, and disruptions to supply chains have lowered the growth projections for multiple countries, especially Ukraine and Russia.

The IMF’s latest Regional Economic Outlook predicts that several major economies, including France, Germany, Italy and the U.K., will barely expand or contract for two quarters this year. Russia’s invasion of Ukraine is forecast to shrink its economy by 8.5% and Ukraine’s by 35%. The IMF also lowered their GDP growth projections by 1 percentage point for advanced economies and by 1.5 percentage points for emerging economies.

Inflation is also projected to hit decade-highs in many countries, rising by 5.5% in advanced economies and to 9.3% in emerging economies (excluding Belarus, Russia, Turkey and Ukraine). The conflict will decrease economic output, while increasing budgetary pressures, particularly in EU countries hosting the most refugees.

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