COVID-19 pandemic will have an enormous impact on people’s lives and livelihoods—that much is clear. The path to recovery is far less so, though it is evident that the crisis has significantly impeded many organizations’ ability to execute capital projects, and may continue to do so for some time.

The availability of labor and materials has decreased worldwide, while more and more balance sheets and cashflows are becoming capital-distressed. Physical distancing and travel restrictions have made it difficult for sectors and countries to get workers safely into plants and construction sites, and vital supplies into global production networks. Government-enforced public-health measures, for example, have disrupted the operations of fabrication yards and construction sites across Asia and Europe.

Freeing up cash by deferring capital expenditures is one of the fastest and most substantial ways to mitigate these ill effects (Exhibit 1). As such, companies across sectors and the globe have announced capital-expenditure cuts ranging from 10 to 80 percent (Exhibit 2). To gain insight on the extent to which specific industries have been affected, we analyzed publicly available notices from some of the largest companies in the world: 98 had announced capital reductions. Although many have announced top-line cuts to capital budgets, however, finance leaders often don’t know which projects to cut or where best to reallocate their capital.