{"id":1003,"date":"2020-09-15T16:22:25","date_gmt":"2020-09-15T23:22:25","guid":{"rendered":"http:\/\/savingusmanufacturing.com\/blog\/?p=1003"},"modified":"2020-09-15T16:22:25","modified_gmt":"2020-09-15T23:22:25","slug":"what-has-been-the-impact-of-covid-19-pandemic-on-u-s-manufacturing","status":"publish","type":"post","link":"https:\/\/savingusmanufacturing.com\/blog\/general\/what-has-been-the-impact-of-covid-19-pandemic-on-u-s-manufacturing\/","title":{"rendered":"What Has Been the Impact of COVID-19 Pandemic on U. S. Manufacturing?"},"content":{"rendered":"\n

How\nmuch the impact of the COVID-19 Pandemic has had on manufacturing depends on\nthe state in which a manufacturer is located and what is the industry of the\nmanufacturer.  According to Ballotpedia<\/a>, \u201cSeven\nstates\u2014Arkansas, Iowa, Nebraska, North Dakota, South Dakota, Utah, and\nWyoming\u2014did not issue orders directing residents to stay at home from\nnonessential activities in March and April 2020 in response to the coronavirus\npandemic. The 43 other states all issued orders at the state level directing\nresidents to stay at home except for essential activities and closing\nbusinesses that each state deemed nonessential<\/a>.\u201d Only South\nDakota did not require any businesses to close.<\/p>\n\n\n\n

On\nMay 8, 2020, CNBC<\/a> reported\nthat by the end of the first month of the shutdown, manufacturing had lost\n1,330,000 jobs, and its supporting \nindustry of transportation and warehousing had lost 584,000 jobs, out of\nthe total job loss of 20.5 million.  <\/p>\n\n\n\n

Accenture<\/a> reported:\nThe automotive industry is a critical component of economic growth with\nextensive interconnections to upstream (e.g. steel, chemicals, textiles) and\ndownstream industries (e.g. repair, mobility services). With nearly 8 million\nemployed in the U.S., employment in the automotive industry has taken a big hit.\nThe automotive industry is considered essential for the global economy and the\nresulting prosperity.<\/p>\n\n\n\n

CNBC<\/a> reported\nthat the \u201cAerospace Industries Association estimates that more than 200,000\njobs in the sector are at risk. Boeing earlier this year said it would aim to\ncut 10% of its workforce, which stood at 160,000 as of the end of 2019. While\nit is hiring for its defense unit, the commercial aircraft division has been\nhit by hundreds of cancellations this year, and CFO Greg Smith told investors\non July 29 that 19,000 employees are departing Boeing. About 6,000 had left as\nof the end of June\u2026At General Electric, which makes engines for both Boeing and\nAirbus planes, the company is cutting a quarter of the jobs, or 13,000 people\nin its aviation unit, which is based in Ohio.\u201d<\/p>\n\n\n\n

An\narticle on PWC.com<\/a> commented,\n“On the defense side of the industry, the situation appears less dire,\nwith demand protected by budgeted government spending and a supply chain with\nminimal exposure to hard-hit jurisdictions such as Asia. However, events\noutside the US are affecting the US defense industry, as some US military\npartner nations may experience challenges in military readiness and ability to\nmaintain equipment. Additionally, some defense companies may be financially weakened,\nbut most likely to a lesser extent compared to consumer-facing aerospace\ncompanies.”<\/p>\n\n\n\n

My\nmanufacturers sales rep agency, ElectroFab Sales, was fortunate in that all of\nthe California companies we represent were able to stay open because they were\nin the supply chain of one or more of the 16 essential industries allowed to\nstay open by California Governor Newsome. However, our open sales orders have dropped\nby 50% since February. This is primarily because too many of  our customers are in the defense and military\nsector, and all new product development for new systems has been put on hold\nindefinitely. In addition, repeat orders for existing systems have dropped.<\/p>\n\n\n\n

The\nsummer newsletter of the Coalition\nfor a Prosperous America<\/a> reported: The term \u2018Made in USA\u2019 is currently\ntracking at an all-tie high since 2004\u201d on Google Trends.  Zach Molti of Atlas Tool Works said that \u201chis\ncompany\u2019s recent sales are up roughly one-and-a-half times their usual\nvolume.\u201d  \u201cBryan Hurley, the owner of\nFlorida-based Americraft Cookware says that his sales have been up 167% of late\ncompared to 2019.\u201d Greg Owns, CEO of Liberty Tabletop, the only flatware\nmanufacturer in the U.S., reported on our Buy American Committee call last\nThursday, that orders are up 200% compared to 2019. <\/p>\n\n\n\n

A\nnumber of CPA member companies had retooled and repurposed their operations to\nrespond to the COVID-19 pandemic to make PPE goods and equipment. Numerous\nother manufacturers all over the country did the same thing.  Even Ford and GM retooled their factories to\nmake ventilators. <\/p>\n\n\n\n

Five\nmonths after the COVID-19 shutdowns began, manufacturing is bouncing back\nfaster than everyone expedted. The September 1st<\/a>\nManufacturing ISM\u00ae Report On Business\u00ae \nissued  by Timothy R. Fiore, CPSM,\nC.P.M., Chair of the Institute for Supply Management\u00ae (ISM\u00ae) Manufacturing\nBusiness Survey Committee showed that \u201cThe August PMI\u00ae registered 56 percent,\nup 1.8 percentage points from the July reading of 54.2 percent. This figure\nindicates expansion in the overall economy for the fourth month in a row after\na contraction in April, which ended a period of 131 consecutive months of\ngrowth. The New Orders Index registered 67.6 percent, an increase of 6.1\npercentage points from the July reading of 61.5 percent.  U.S. manufacturing activity came back strong\nand exceeded expectations for August, expanding at the fastest rate in almost\ntwo years.\u201d<\/p>\n\n\n\n

However,\n\u201c\u2026(1) commercial aerospace equipment companies, (2) office furniture and\ncommercial office building subsuppliers and (3) companies operating in the oil\nand gas markets \u2014 as well as their supporting supply bases \u2014 are and will\ncontinue to be impacted due to low demand. These companies represent\napproximately 20 percent of manufacturing output. This situation will likely\ncontinue at least through the end of the year,\u201d says Fiore.\u201d<\/p>\n\n\n\n

In\nan article on Manufacturing.net<\/a>, Melvin\nBosso, a principal with Myrtle Consulting Group, stated, \u201cReshoring is also an example of a dynamic\nthat had started long before COVID-19 and will continue far beyond the\nemotional reaction to the catastrophic effects of the crisis.\u201d He said, there\nare \u201cfour major clusters of reasons why a company makes a decision on\nhow to deploy their supply chains: Costs, Service, Technology and Risk\u2026most organizations have had to rethink\ntheir understanding of the fourth cluster \u2013 Risk\u2026. All supply chains that run with a just-in-time inventory strategy\nhad to deal with a shortage risk when China, and more broadly Asia, locked\ndown. All essential industries are coming out of the crisis thinking about\nalternatives. Many are working, or will be working, to find ways to change\ntheir exposure.\u201d<\/p>\n\n\n\n

Harry Moser, Founder and President of the Reshoring Initiative\u00ae <\/a>recently\nstated, \u201cCOVID has caused companies to reevaluate their supply chains. Often,\nshorter is better. By 4Q20 we expect to be helping 50 to 100 companies either\nbuy smarter or sell smarter against imports. In most cases, we are providing\nthis support through MEPs (Manufacturing Extension Partnerships) which exist in\nevery state.\u201d<\/p>\n\n\n\n

We\nneed to take advantage of this wake-up call to the risk of global supply\nchains, particularly our reliance on China, to create incentive plans to bring\nback manufacturing segments that are considered critical for national\nsustainability. Now is the time to reshore key industries from China to reduce\nthe risk of future supply chain disruptions due to unforeseen events.  American consumers want to buy more \u201cMade in\nUSA\u201d products.  Our government needs to\nuse domestic manufacturing as part of its plan to build up strategic resilience\nin the aftermath of the current crisis.  It\u2019s time for Congress to support reshoring\nwith the right trade, tax, and currency policies to facilitate making the\nreshoring trend permanent. <\/p>\n","protected":false},"excerpt":{"rendered":"

How much the impact of the COVID-19 Pandemic has had on manufacturing depends on the state in which a manufacturer is located and what is the industry of the manufacturer.  According to Ballotpedia, \u201cSeven states\u2014Arkansas, Iowa, Nebraska, North Dakota, South Dakota, Utah, and Wyoming\u2014did not issue orders directing residents to stay at home from nonessential […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[11,277,46,26],"class_list":["post-1003","post","type-post","status-publish","format-standard","hentry","category-general","tag-american-manufacturing","tag-covid-pandemic","tag-job-loss","tag-reshoring-2"],"_links":{"self":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/1003","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/comments?post=1003"}],"version-history":[{"count":1,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/1003\/revisions"}],"predecessor-version":[{"id":1004,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/posts\/1003\/revisions\/1004"}],"wp:attachment":[{"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/media?parent=1003"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/categories?post=1003"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/savingusmanufacturing.com\/blog\/wp-json\/wp\/v2\/tags?post=1003"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}