Businesses of all sizes should start making contingency plans to deal with the swine flu pandemic, after the government's warning that the number of people falling ill with the virus could soar to 100,000 a day by August, employers groups have warned.
With the government moving from attempts to contain the spread of the virus to a "treatment phase", the impact on businesses and the wider economy could be substantial.
Oxford Economics, an economic forecasting group, warned last month that global economic recovery could be slowed abruptly by swine flu and "companies that are already fragile after the recession may succumb to this new shock". It calculated that if the pandemic were to last six months, world GDP could be cut by £1.5tn - or 3.5% of GDP for 2009. The eurozone and the UK could lose 3% of GDP.
The forecasters said the pandemic could hit economic activity in "manifold" ways, including supply effects, such as people being unable to go to work, and demand effects, which will hit consumption, as people avoid crowded shopping areas and transport hubs.
"Increased uncertainty would also have a negative impact on financial markets," they warned.
John Cridland, deputy director general of CBI, said companies had to make plans to trade through the impact of the virus: "All firms need to ensure they are prepared if swine flu becomes more serious in the UK."
A spokesman for the Forum for Private Business, which represents 23,000 small businesses with an average workforce of 10 staff each, said smaller firms needed to make plans to cover essential roles: "It is imperative that firms plan ahead now, to get ready for the impact this could have. If you are one of the smallest firms you must plan to make sure people get paid and invoices get paid. It is essential to form project teams as soon as possible and make sure you comply with the law."
The impact of the virus, if it spreads as rapidly as the government has warned, could shut businesses and shops, and leave others short of stock if distribution centres and delivery drivers are hit. Transport services and airlines could also be affected.
A spokesman for British Airways said: "We have had a pandemic flu planning group running for the last few years, who have been tasked with contingency planning in the event of an outbreak." The airline said it also had "a medical team within the airline who are actively monitoring the advice from the authorities" and "detailed continuity plans" to keep BA's planes in the air.
Marks & Spencer has set up a "pandemic working party" that is holding regular meetings "to assess developments and strategy". A spokesman said: "We do scenario planning. We are well set up for it." He added: "We are pretty confident our contingency measures will allow us to keep stores open."
Tesco, which employs 468,000 staff in 4,300 stores worldwide - including 2,300 UK shops - said it has "a robust plan" and did not envisage any stores running short of stock as a result of staff shortages at distribution centres or having to close any stores if large numbers of staff had to take time off.
"We have a plan to deal with all these types of scares," a Tesco spokesman said. "If one store has a problem, we can support it from another store.
"We are pretty confident we can get through unaffected, but it's a tough call until you know the severity of the outbreak."
