More than one-third of U.S. manufacturers say they’re facing supply-chain disruptions from the coronavirus outbreak, and more than half expect work slowdowns, according to a new survey by the National Association of Manufacturers.
The survey found that 78.3% of manufacturers anticipate a negative financial impact from the virus outbreak, and 53.1% expect a “change in operations” as a result.
“Already, manufacturers are grappling with disruptions to their businesses due to the COVID-19 outbreak, with many anticipating financial and operational consequences — even before some of the developments of this week,” said NAM President and CEO Jay Timmons.
Wall Street is taking a beating from the outbreak, too. Stocks were set to open more than 4% lower on Thursday, after indexes entered bear-market territory on Wednesday by losing more than 20% from their highs three weeks ago.
Mr. Timmons said the federal government can take steps to help manufacturers deal with the outbreak by implementing the associations’ recommendations, including tax credits for employers who continue to pay workers who are quarantined, or when a business is forced to close temporarily; greater tax deductions for employers who invest in safety equipment; and protections for employers under medical privacy laws to allow companies to inquire about “employee health information relating to COVID-19 to ensure a safe workplace.”
The administration is planning a series of actions to help businesses and sectors hurt by the virus, including low-cost loans from the Small Business Administration and relief for workers who are ill. President Trump is also calling for a cut in payroll taxes through the end of the year, but House Democrats oppose that idea.
The survey by NAM found that 35.5% of manufacturers are facing supply-chain disruptions already, causing parts to arrive late and delays in deliveries to customers. They expect disruptions to become more serious if slowdowns continue beyond the second quarter.
On operations, manufacturers are evaluating work schedules and inventory levels, fielding “work from home requests” and implementing “business continuity” response plans that include curtailed travel, workplace sanitation, restricted face-to-face interactions and “staggered shifts on the shop floor to help compensate for higher-than-normal absences,” NAM said.
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