As the COVID-19 coronavirus continues to cause chaos around the world, industry and manufacturing continues to suffer as well. From the ground level, it can be difficult to tell just how much impact COVID-19 is having, but we all know there are major problems. Fortunately, the industry group, Thomas has been conducting continuous surveys of North American businesses, and has put together an important look at how the coronavirus is impacting operations.
These are a few of the factoids and statistics that jumped out at us as most important to keep an eye on.
The Four Top Takeaways From Thomas’s March 2020 Coronavirus Impact Study
1. Fewer businesses consider themselves impacted in March, vs February
Consider this one tentative good news. In February, 60% of businesses said they were being impacted by the outbreak. In March, that number dropped to 45%. Unfortunately, the survey did not go into why that statistic dropped, although a good guess is that those 15% of businesses were already able to adapt and carry on.
2. Lowered fuel prices are expected to help ease the pain
As another piece of semi-good news, the drop in fuel prices is seen by 53% of respondents as a fundamentally positive thing that will reduce their costs. Of course, fuel prices are notoriously elastic, and while low prices may be good in the short term, there’s no telling where they’ll be in six months.
3. Almost half of US manufacturers are now looking for domestic suppliers
Those predicting that the coronavirus would lead to less reliance on foreign supply lines seem to be right. Only 34% of surveyed businesses currently say they’re still looking to overseas suppliers (versus 43% a month ago) and 47% are now actively seeking domestic suppliers instead.
Likewise, when reporting the biggest sources of impact from the coronavirus, 42% cited disrupted shipping, and another 36% cited reduction or suspension of work at offshore factories.
4. Many more businesses expect their revenue to decline
In terms of hard numbers, more businesses are feeling the pinch. 55% of manufacturers now expect their revenues to decline this year as a result of the coronavirus, compared to 31% who expect revenues to remain steady. This is basically the reverse of findings in February, where 34% expected decline and 53% expected steady returns.
On the other hand, the number of businesses expecting revenue to grow in 2020 were only 13% and 14% in February and March, respectively.
In short, businesses are doing their best to adapt and overcome, but the large majority are facing significant challenges – and the more they rely on foreign manufacturing or logistics, the worse their situation is. Hopefully the situation will improve over time, but with most experts forecasting at least another month or two of disruption due to the disease, this remains a very uncertain time.
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