What will manufacturing look like as companies start to reopen?
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There have been some recent signs of slight economic improvement in May — now that states and businesses are tentatively reopening.
That reopening includes manufacturing, where, for example, auto plants have started ramping up production again. That comes along with new health monitoring and assembly-line precautions to keep workers safer.
The Federal Reserve Bank of Richmond’s manufacturing index for May rebounded from a record low, but it’s still at its lowest level since 2009.
Manufacturers of autos and aircraft, oil and gas producers have all been hit hard by plummeting business and consumer spending.
Even in sectors where demand is still high, like food processing, the coronavirus has infected workers and slowed production. Arun Sundaram at CFRA Research says some meatpacking plants shut down, retooled and reopened.
“Not to the full capacity pre-COVID-19,” Sundaram said. “There are still challenges keeping workers safe, social distancing within the plants.”
Increased automation and the use of more robots could be a solution to crowded, hands-on production lines.
But Ned Hill, at the Ohio Manufacturing Institute at Ohio State University, says in the near-term, don’t bet on it.
“I don’t expect to see lots of capital investment,” Hill said. “Companies right now are trying to pay attention to their burn rate on cash, to make sure they stay open.”
Manufacturers laid off 1.3 million workers in April.
COVID-19 Economy FAQs
With a slow vaccine rollout so far, how has the government changed its approach?
On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.
What kind of help can small businesses get right now?
A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.
What does the hiring situation in the U.S. look like as we enter the new year?
New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.
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