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Factories Feel The Coronavirus Slump

Photo caption:

Photo by Jeff Kowalsky AFP via Getty Images

Workers leave an FCA Chrysler truck plant in Detroit on March 18 after the automaker shut down all of its North America factories as a precaution against the coronavirus.

Factories in the U.S. are hunkering down like the rest of us.

Manufacturing activity slowed in March, according to a survey conducted by the Institute for Supply Management.

Production and factory employment fell sharply, as the coronavirus pandemic and other problems weighed on the factory sector. New orders hit their lowest level in 11 years.

Factories were among the first to feel the effects of the deadly virus months ago, as supply lines from China were disrupted. Export markets also suffered. And now that the virus is spreading rapidly in the U.S., domestic manufacturing operations are also feeling the squeeze.

Some large auto plants have shut down altogether, in an effort to protect workers. Other factories continue to operate, but "social distancing" can pose challenges in a factory environment. One machine shop operator reported a 30% drop in productivity.

"The coronavirus pandemic and shocks in global energy markets have impacted all manufacturing sectors," said Timothy Fiore, chairman of the ISM's Manufacturing Business Survey Committee.

With tens of millions of Americans under orders to stay home, demand for big-ticket items has suffered. Factories that supply the hospitality industry are also hurting. And the steep drop in oil prices is cutting demand for manufactured pumps and pipelines used by energy producers.

Despite the downturn, some factories are seeing a boost in business.

"We are experiencing a record number of orders due to COVID-19," one manager in the food and beverage industry reported. Americans continue to stock up on groceries during the pandemic. Factories that produce toilet paper are also staying busy.

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