The Disadvantages of a V-Shape Economy Post COVID-19

Economists describe recessions by their shape. The shape terminology simply characterizes how a recession looks in terms of its economic data on a graph. The most common recession shapes are V, U, W and L.

 What is a V-shaped Recession?

When an economy suffers a brief and sharp economic decline and then recovers well, this is a V-shaped recovery. This is in contrast with a U-shaped recession, which has a trough that isn’t as easily defined. In other words, it takes longer for an economy to come out of a recession.

The Economy and COVID-19

It’s evident throughout the world that the COVID-19 pandemic has had a dramatic and unprecedented effect on global economies. With businesses being forced to close, travel being restricted and a clear message to stay at home, the economy has shrunk dramatically in a span for a couple of months.

In the beginning of the pandemic, many economists hoped for a V-shaped recession. It was well known when travel was affected that there would be a dramatic effect on the economy, and the hope at that time was for a “temporary” crisis and a quick rebound. For example, in the UK, economy shrank by over 19% from March to May and the optimistic outlook was that the financial damage was short term. However, in July 2020, economists began to warn the media that a V-shaped recovery was looking increasingly illusive. Again taking the example of the UK, the economy only expanded by 1.8% in May although it was anticipated to bounce up to 5.5% and now, predictions show that the British economy will not go back to pre-crisis levels until the end of 2022!

However, any prediction of recovery is strongly depending on treatment, the public’s acceptance of the vaccine, and no appearance of any more strings of the same virus.

Disadvantages of a V-Shaped Recovery

Going back to the V-shaped recovery and even though it is looking quite unlikely, it is important to address its risks as some businesses are still hoping for a quick fix.

Many companies have faced serious leverage levels that are daunting. If the economy recovers as a V-shape, these businesses will fall off the radar without support. With a gradual recovery, businesses will have more time to adjust as demand starts to increase. Ona larger scale, it is important to consider national debt too as a result of the crisis. If we have a sudden V-shaped ‘swoosh’, it might mean that the recovery period and the upward trend do not last long enough for people to pay off their debts. The truth is that the country is going to have more debts than it ever has before, and even when the COVID-19 crisis is solved, the debts will still linger for a long time to come.

From a manufacturing perspective, the best example to support the argument against a V-Shaped economy is the 2016 crisis when the market was down and then back up overnight. This hit production facilities hard because they could not deliver products and meet demand – this caused a surge in prices and increased demand for second- hand machinery.

COVID-19 and hope for recovery

The first COVID-19 vaccines have been authorized for use and dissemination has begun in several countries, marking a major turning point in the pandemic and bringing fresh optimism for a next normal in the new year. These vaccines were developed four times faster than any other in history, but they will also require a rollout four times greater, amounting to the largest simultaneous global public-health initiative ever undertaken. Stakeholders face another hurdle to widespread vaccine adoption: some consumers remain skeptical of COVID-19 immunization. To reach herd immunity, McKinsey & Company have concluded in their report titled “COVID-19: Implications for business” that adoption ranges would need to be greater than those of vaccines for the flu and other diseases to an approximate 58% to 94% higher.

Nonetheless, since the announcement of a vaccine, CEOs continue to develop their COVID-Exit strategies, McKinsey & Company have analyzed how companies have found a successful COVID-Exit path with transformations that balance portfolio moves and performance improvements. A new global survey of more than 800 executives reveals that companies are prioritizing business building for organic growth, launching new businesses at an accelerated rate and, in turn, growing faster. The strongest companies are also reinventing themselves through next-normal operating models, capitalizing on this malleable moment and the resulting spread of agile processes, nimbler ways of working, and increased speed and productivity.

While that’s highly positive news, McKinsey’s research also finds that the new vaccines are likely to accelerate only slightly the timetable to the end of the pandemic. In the United States, normalcy is not likely until the second quarter of 2021, and herd immunity is not likely until the third quarter. In other words, the pandemic will not be vanquished soon, and businesses will continue to be challenged.

The most likely scenario is a U-shaped recovery – with so much uncertainty and the second wave upon us, it is quite possible for many businesses will close or even worse declare bankruptcy again leading to fewer jobs. With these factors taken into consideration, consumers will not have the spending power that they did pre-coronavirus crisis.

For a V-shaped recovery, we would have to reopen the whole economy at the same time, and life would have to resume to pre-crisis status financially, socially and psychologically , i.e. no changes in habits in terms of going to bars, shopping,  travelling, sports arenas, etc. This is increasingly less likely, given what we now know of COVID-19.

Recovery Steps

Back in April, Janet Yellen, the former Federal Reserve Chair, told CNBC that she believed a V-shaped recovery was possible:  “I think a ‘V’ is possible, but I am worried that the outcome will be worse and it really depends to my mind on just how much damage is down during the time that the economy is shut down in the way it is now,” Yellen said.  That will be determined by whether employers can bring workers back quickly and if consumers aren’t too badly damaged to return to spending once social distancing associated with the coronavirus is rolled back.

“The more damage of that sort is done, the more likely we are to see a ‘U,’ and there are worse letters like ‘L,’ and I hope we don’t see something like that,” Yellen said.

On top of this, businesses are now having to make decisions on whether or not COVID-19 is a seasonal problem, which could mean problems for many years to come. When businesses don’t have confidence in the economy and the public’s opportunities for spending, it means that they hold back.

Only time will tell what shape the economic recovery of COVID-19 will be!



Tower Cranes and Demolition Work

Following the mega event that occurred in Abu Dhabi on November 27th where Modon Properties, the UAE-based developer of sustainable residential communities, had set a new Guinness World Record title for the ‘Tallest building demolished using explosives (controlled demolition), with the successful razing of Mina Plaza towers in the Mina Zayed area, Abu Dhabi, we thought it fitting to talk about demolition and tower cranes.

Work to demolish redundant structures often involves cranes but their importance is gaining popularity more recently over other more traditional methods. Usually, there are two ways of demolishing a building: either by  explosives like with the Mina Plaza towers or by using  tower  or mobile cranes and scaffolding to bring down the building piece by piece. Rather than simply knocking things down, many of today’s demolition projects might better be described as deconstruction or dismantling operations. This type of work often requires a more delicate approach and is ideal for cranes.

Floor-by-floor demolition

 Also called Top Down Demolition, floor-by-floor demolition is a procedure that is both technical and complex, where demolition is more of a dismantling operation. Taking a building down in this way needs meticulous engineering investigation from start to finish.  Congested and already built-up urban sites mean neighbouring buildings are often too close for explosive demolition or other similarly disruptive methods. Tower cranes are a widely used solution in these situations and it is a growth area of application

With this method of demolition, the structure is brought down piece by piece from the top down, which is often why it is referred to as ‘top-down demolition’. Often, scaffolding is erected alongside sheeting and crash decks. Firstly, the building will be stripped of elements that don’t form part of the integral structure: services, windows and doors, for example. This is called ‘soft stripping’ whereby the building is “stripped” completely until only a bare concrete shell remains.

 Tower cranes are then used to lift machinery such as small excavators or steer loads to the current working level. The tower crane will lift up small excavators to the roof level. Once up on the roof, these excavators will create ramps and openings for waste debris to be transported down the building. They will then work on removing the roof first. A skid steer’s job is to load any material into skips or the lift shaft. Tower cranes areused to bring down debris to the ground level: a tower crane is capable of lowering down skips full of debris from the current working level to the ground level.

Of course, the tower crane will have tie rods anchoring it to the building. Also, when the demolition is moving downwards, the tower crane will need to shorten itself autonomously by taking out pieces of its support stem. When planning the installation, if the tower crane has to be fixed to the building, then its ties need to be protected from falling demolition waste. Its base also needs to be suitably arranged to remain unaffected by the demolition work.

Tower cranes can also be used to create cocoon-like protection systems to help resolve any emergency situation on the site.

Emergency Uses of Tower Cranes During Demolitions

 On a demolition site, one of the biggest health and safety This is when tower cranes can be used to complement standard health and safety procedures to provide an excellent evacuation device. Indeed, with a basket that is safety-rated, a tower crane can be lowered or raised to reach anyone that needs to evacuate  for an emergency.

Why Use Floor-by-Floor Demolition?

 There are many advantages to using top-down demolition. It is by far the safest way of taking down medium-rise and high-rise properties and it means that engineers have lots of control on site and can therefore protect both people on site, and others near to the site.

Depending on the size and capacity of the building, up to three cranes could be installed. In addition to the health and safety aspect of using tower cranes for top-down demolitions, this method is also much more environmentally friendly.

 Indeed, demolishing a building ‘top-down’ using tower cranes has much less of an impact on the environment. Using a top-down method with tower cranes makes the process more efficient whereby materials can be segregated for recycling and safer for the surrounding environment   because – unlike with explosives where everything is left in a mixed-up heapwith moreharmful products and dust released into the air.

Vibration and Noise

 Vibration and noise go hand in hand with demolitions. They disturb both local residents and wildlife. Demolition sites are able to keep noise and vibration to a minimum using tower cranes by:

  • Making sure the equipment and tower cranes are maintained properly
  • Removing concrete and hardcore with the quietest methods available
  • Remove materials with part of the building’s external structure intact according to its stability
  • Only work during appropriate (and agreed upon) working hours


 With traditional demolitions using explosives, dust is a huge problem. It disturbs local residents, affects wildlife, affects green areas and escapes into waterways. Usually, dust can be minimised by a process of dampening down via water supplies or fire hose that spray the piled demolition. There are also spill kits and protective booms that prevent the water from running into drains or waterways. By using tower cranes and a top-down demolition approach, there will be even less dust due to materials being extracted much more carefully away from the public.

The future looks bright for using cranes to dismantle wind turbines, especially in Europe. Indeed, At the turn of the year 2020-2021, more than 5,200 wind turbines in Germany will reach the end of their 20-year feed-in tariff support under the Renewable Energy Sources Act (EEG), with a further 8,000 to follow by the end of 2025. To help manage dismantling and recycling of wind turbines in a safe, reliable and professional manner, a uniform standard has been published for the first time. On 17 July 2020 the German Institute for Standardization published what it says should be considered the industry standard, according to RDRWind, for dismantling and recycling wind turbines. DIN SPEC 4866, titled Sustainable Dismantling, Disassembly, Recycling and Recovery of Wind Turbines, is a 26-page document stipulating framework conditions for the entire dismantling process from planning, via the actual dismantling, through to documentation.




Modon Properties sets new Guinness World Record with demolition of Mina Plaza towers in Abu Dhabi