Which Manufacturing Sectors is COVID-19 Hitting Hardest?
COVID-19 has hit manufacturing harder than almost any other industry, save for travel and hospitality. But manufacturing is broad and diverse, and not every producer faces the same level of disruption or disturbance as every other. Some sectors of industry are poised to rebound as local economies begin to open up again, while others face grim prospects for 2020 and beyond. Here’s a look at some of the industries set to face headwinds, as well as those poised for a bounce back.
Aerospace and automotive
It’s hard to quantify the tremendous damage done to the aerospace and automotive industries since the beginning of the COVID-19 crisis. There are, however, several alarming figures that give insight into just how difficult times are for these manufacturers.
In the aerospace sector, no company has face tribulation like Boeing. Even despite its standing as a cornerstone of the U.S. economy, Boeing plans to slash its workforce by 10%. While rival airbus hasn’t announced deep cuts to its workforce or operations yet, CEO Guillaume Faury has called the COVID-19 crisis “the gravest crisis the aerospace industry has ever known.” Airbus also posted $515 million in losses for the first quarter of 2020.
In the automotive sector, the picture is much the same. Automakers face significant obstacles due to COVID-19 — namely plummeting consumer demand. Volkswagen saw sales fall 23% over the first quarter. Ford posted a $2 billion loss — and, to illustrate how devastating the virus has been, CEO Tim Stone claims the company would have made $1.4 billion in profit if not for the pandemic. All told, the latest figures show an astounding 80% slump in auto sales in states with shelter in place orders.
Food processing hasn’t been a beacon of positivity, even despite the massive consumer demand. Headlines have been largely negative due to the meatpacking industry, which has become a hotbed for new COVID-19 infections. That said, this sector of the manufacturing industry isn’t faring so poorly as others. There’s heightened demand for animal protein as people buy and freeze food in anticipation of shortages, and food staples continue to be in high demand in supermarkets across the country. Even breweries aren’t hurting as bad as one might think during the downturn! Taprooms may be closed but people are still imbibing!
Packaging and sanitary products
Paper and packaging are up according to most major industry metrics. The reason? Aside from the run on toilet paper that marked the start of the pandemic, delivery by mail has buoyed the packaging sector. As Amazon deliveries rise, so does demand for the boxes and packaging needed to ship goods.
Likewise, sanitary product production is through the roof for both professional and private use. Products like hand sanitizer, sterilizing wipes, soap, and general sanitary grooming staples are flying off production lines and shelves as people continue to be mindful of virus spread.
The elasticity of manufacturing
Manufacturing covers a broad array of production capabilities. Although some will take longer to recover than others, many will rebound out of COVID-19 with momentum. The cyclical nature of many production products also will play a role in the long-term recovery of the manufacturing economy. Manufacturing is in for a rough road ahead, but there are bright spots to consider as the situation becomes clearer.