Like all other sectors, the manufacturing industry has been significantly affected by COVID-19.
On top of disruptions in supply chains, demand, and the manufacturing workforce, there’s a new focus on safety precautions because of the risk the virus presents and the changes that have had to be made. Find all about the industry impact and safety precautions developing in manufacturing below.
The Impact of COVID-19 on the Manufacturing Industry
Significant upheavals due to the global pandemic are to be expected, but what are the specific effects on the industry?
Rising Costs
According to the National Association of Manufacturers (NAM), one of the developments in the US manufacturing industry noted in July of this year was a significant increase in prices.
Wholesale producer prices rose by 0.6%—the biggest surge in over two years—, while core prices rose by 0.3%. However, experts do not see this increase as a serious long-term concern, as costs are currently stabilizing and should continue to level out over time.
Increase in Jobs
Changes to the job market were anticipated as a result of the COVID-19 pandemic. However, many were surprised that in July there was actually an increase in job openings.
There were 408,000 manufacturing job openings listed in July, which was 60,000 jobs more than the previous month and the most job listings seen since February of this year. This is a positive sign for the industry, showing that businesses are ready to rebound from the upheavals earlier this year.
Project Delays
With a range of new restrictions and regulations arriving in response to the pandemic, perhaps the most predictable outcome was that some manufacturing and infrastructure projects would experience delays.
Some states also saw record numbers of project cancellations, many of those canceled being state- or locally sponsored infrastructure projects. Around $9.6 billion worth of projects have been delayed or canceled, and a level of uncertainty remains even for ongoing projects.
Supply Chain Bottlenecks
With varying levels of restrictions and travel bans in place in different countries, supply chains have been disrupted on a global as well as national level. For example, in many cases, manufacturing businesses in the US have experienced supply chain bottlenecks because of delays in manufacturing in Asian countries since the start of the year.
Reduced Demand
Manufacturing demand has dropped, due in part to more financially conservative attitudes from both governments and individuals caused by the uncertainty surrounding the pandemic.
Due to the drop in demand, some businesses have already gone out of business because of the inability to cover costs.
The Safety Precautions Being Utilized in Reaction to the Pandemic
Because of the changes being brought about by the pandemic and the particular risks the virus presents, it’s important to take safety precautions. Here are some that are now being utilized in the manufacturing industry:
The Creators Respond Pledge
NAM is currently encouraging manufacturing businesses to pledge to promote safe practices while the pandemic is still ongoing. The Creators Respond pledge invites manufacturers to commit to safe practices including using face coverings, social distancing, consistent disinfecting, and washing hands, as well as other key safety measures recommended by the CDC.
NAM’s Renewal Action Plan
NAM has also created the Renewal Action Plan, which outlines what needs to happen in order for the economy to start to recover from the impact of the pandemic.
As part of the Renewal Action Plan, NAM discusses some of the things that they feel are required by various government bodies and the Department of Labor to move the economy forward, including providing COVID-19 tests that are widely available, temperature checks in workplaces, an official return to work guidance, mandatory use of face coverings, and the flexibility to modify schedules.
The Importance of Strong Insurance
For businesses continuing to operate in the manufacturing industry throughout all of this, the importance of strong insurance protection has never been greater. Knowing that you’re covered from the negative impact of many common risks delivers extra security and peace of mind in the most uncertain of times.
Although there will always be inherent risks in any industry, manufacturing insurance can provide security from supply chain and business interruptions with business income interruption insurance, protect against product and general liability claims, and provide for your employees as well with workers’ compensation insurance.
Safety precautions, both against the passing of the virus and against financial losses, are a necessary measure in the manufacturing industry. Make sure your business is prepared for both the continuing effects of COVID-19 and for future disasters by implementing serious safety practices.
