News from the NAM
Selected Information from the National Association of Manufacturers newsbriefs
And the survey says . . . the vast majority of manufacturers have kept their doors open, according to the Manufacturers’ Outlook Q2 Survey.
The bottom line: Despite a historic drop in optimism—to 33.9% from last quarter’s 75.6%—and challenging business conditions, the vast majority (98.7%) of manufacturers have continued or only temporarily halted operations.
Combating the virus: The survey also shows that manufacturers are finding innovative solutions to keep businesses running and to protect workers and communities:
- Almost 22% are retooling to produce personal protective equipment
- 67% are reengineering processes to reflect COVID-19 safety protocols
- 12% are completely reevaluating the mission of the firm
See full survey results and summary here.
Global Economic Trends – Major Markets
China was the only one of the top 10 markets for U.S.-manufactured goods to expand in May, returning to positive territory after pulling lower in April. In the previous month, most of the top 10 markets had contracted at paces that were either the worst since the Great Recession or at record lows. In May, seven of these economies saw improvements, albeit at rates of decline that remained quite severe. Here are more details on each of these major markets (in order of their ranking for U.S.-manufactured goods exports in 2019):
- Canada: up from 33.0 in April, the worst reading since the survey began in October 2010, to 40.6 in May. Data improved across the board, but with overall activity still the second-lowest ever. Respondents were optimistic in their outlook for future output.
- Mexico: up from 35.0, a record low for a survey that began in April 2011, to 38.3. Demand and output improved from historic lows but continued to deteriorate sharply.
- China: up from 49.4 to 50.7, the best reading since January, with the strongest monthly gain in output (up from 51.1 to 54.0) since January 2011. New manufacturing orders and employment stabilized somewhat but remained negative. Exports (up from 33.7 to 41.7) improved in May after plunging at the fastest rate since December 2008 in April.
- Japan: down from 41.9 to 38.4, its worst reading since March 2009. New orders, output and hiring fell at the fastest paces since the Great Recession.
- United Kingdom: up from 32.6, the lowest reading in the survey’s 28-year history, to 40.7. New orders, output and exports recovered somewhat in May from jaw-dropping declines in April but still contracted severely. U.K. manufacturers are cautiously upbeat about future output, however, with that measure at a 3-month high.
- Germany: up from 34.5, the lowest point since March 2009, to 36.6. Demand, production and exports continued to deteriorate at sharp (but slower) rates. Hiring (down from 37.2 to 36.5) fell further, declining at its fastest pace since May 2009.
- Netherlands: down from 41.3 to 40.5, the largest deterioration in activity since April 2009. Very severe contractions occurred in demand, production and hiring in May, albeit with marginally slower rates of decline.
- South Korea: down from 41.6 to 41.3, its lowest level since January 2009. Employment fell at the fastest pace in the survey’s history, which dates to April 2004. New orders, output and exports improved slightly but continued to decline very sharply.
- Brazil: up from 36.0, a record low for a survey that began in February 2006, to 38.3, with progress across the board, even as activity remained the third-lowest ever. (The second-lowest reading was 38.1 in January 2009.)
- France: up from 31.5, an all-time low in the survey’s 22-year history, to 40.6. Demand, production and employment improved somewhat from record low rates but continued to deteriorate. Future output remained negative, albeit with expectations of declines that were better than the record low rate anticipated in April.
More from the NAM – including COVID-19 resources
Visit https://www.nam.org/ for other NAM news and insights and the NAM’s Coronovirus Resources, including extensive up-to-date information on state and local declarations and their impact on manufacturing operations and facilities.