May 22, 2024


Sapiens Digital

How Coronavirus Has Affected US Manufacturing Growth

The COVID-19 novel coronavirus has hit the tech world hard. Production of LED screens, smartphones, wearables, and gaming consoles have suffered because of work stoppages in China and the surrounding areas. As the disease has spread, US manufacturing has also taken a hit.

The Institute for Supply Management has released its latest Purchasing Managers’ Index. This monthly survey measures new orders, production numbers, employment, supplier deliveries, and inventories to provide a manufacturing growth that can act as key economic indicator for the United States.

In the February, 2020 PMI, the index fell to 50.1 percent; any value above 50 indicates an expansion of manufacturing. The index had been below the 50 percent line between August and December, rose sharply in January, then fell again in February.

Some of the reasons given for the fall by industry executives are the uncertainty around the Chinese market. Many American companies source materials from China, so any delay in shipment to the US will negatively affect manufacturing numbers.

Everything isn’t as bad as it seems, though. The ISM assures that “a PMI above 42.8 percent, over a period of time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 42.8 percent, it is generally declining.”

If the country is currently sitting at around 50 percent, US manufacturing isn’t declining, at least. 

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