A new survey of 755 North American manufacturing companies found that the Covid-19 outbreak in Asia has started to impact manufacturing supply chains in the Western hemisphere. The survey, conducted by Thomas, a marketing and data platform for the manufacturing industry, found 60 percent of North American companies it surveyed are affected in some way by China's disrupted supply chains and limited production output.
Nearly half have shipping disruptions. One-third experience delays.
Of the companies surveyed, 24 percent have production facilities in China and 45 percent reported a disruption in shipping. Another 31 percent said they have been forced to delay or reject orders while they look for ways to adjust, 10 percent reported a decrease in demand for products and services, while 8 percent said the cost of goods has risen because of the coronavirus outbreak.
"Ultimately, the coronavirus outbreak will cause a slowdown, especially for the automotive and tech sectors," said Thomas CEO Tony Uphoff.
Businesses are encouraged to diversify supply chains.
Uphoff recommends that businesses diversify their supply chains to meet demands and weather the slowdowns caused by the virus.
Many of the manufacturers surveyed have done just that, with 28 percent having already started to look for alternative suppliers in the U.S., India, and Mexico. Meanwhile, another 27 percent reported no change in demand.
While manufacturing appears to be slowing because of the virus, other industries are seeing an uptick. Thomas has tracked a 1,000 percent month-over-month increase in sourcing activity related to hazmat suits, masks, and respirators, and 15 percent of the companies surveyed reported an increase in demand for materials like electronic components, metal, and plastic. One respondent, an original equipment manufacturer (OEM) based in Washington, said: "We've long aimed to be a domestic alternative to Chinese manufacturers ... If anything, this just further asserts that we are on the right path."