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Thomasnet.com®

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2020 Coronavirus’ Impacts on North American Manufacturers

Thomas’ April 2020 COVID-19 Manufacturing Survey reveals that:

  • Manufacturers Report Significant Jump in COVID-19-Related Impacts: 89% of our respondents reported they felt impacts from COVID-19 in April, compared to only 45% in March. 41% of surveyed manufacturers expect a decrease in demand for their products and services.
  • Two Biggest Concerns Are Reduced Market Demand and Disrupted Cash Flow: Many reported staffing issues due to challenges in maintaining social distancing and PPE supply, as well.
  • Manufacturers Restructure: 44% have already experienced or are planning layoffs, but 31% are hiring. One in seven companies pivoted to COVID-19-related manufacturing.
  • Stronger Reshoring Interest Compared to March: Two-thirds of the companies stated they are likely to reshore; of those companies, 20% stated they are extremely likely to reshore, compared to only 9% in March.
  • Companies Remain Optimistic About the Future: 91% of respondents believe that North American manufacturing can recover from this pandemic.

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Key Insights

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I. COVID-19’s Economic Impact on North American Manufacturing

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A Boomerang Effect on Manufacturers Affected by COVID-19

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Product and Service Demand Expected to Decrease

*Respondents selecting “other” indicated complete or temporary facility shutdowns and varying demand.

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Reported Business Impacts From the COVID-19 Pandemic

*See next page for qualitative responses under ‘Other’

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How Is Your Business Being Affected by the COVID-19 Outbreak?

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  • “Our aerospace customers are increasing their demands while our commercial and industrial clients are declining in their demand.”
  • “[We are implementing] revised work hours for all employees to maintain safety, social distancing, [and] one week on, one week off [schedules] for production workers.”
  • “Decision-makers need to get back to work. Projects are put on hold as potential clients have ‘frozen’ any purchasing.”
  • “Stay-at-home orders [are] preventing us from working at customer’s locations even though we are essential.”
  • “It’s a challenge to keep everybody productive. When our employees hear that laid off people are getting unemployment checks and an additional $600/week from the government, they would prefer to be at home. Some employees have asked if we are going to pay hazard pay and give them special insurance for the virus.”

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Decrease in Domestic Demand Across Industrial Sectors

*See next page for qualitative responses under ‘Other’

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How Has Domestic Demand for Your Product/Services Changed Since the COVID-19 Outbreak?

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  • “I think we need to source more domestically and manufacture domestically. All our sourcing issues revolve around Chinese goods.”
  • “We expect Q3 to be back at near 100%, then Q4 and beyond to be above 100% of our original forecasts.”
  • “Until we pivot - demand has dropped dramatically.”
  • “Changes in demand (increase/decrease) amongst clients in different industry sectors. Definitely increased demand from clients in healthcare-related sectors.”
  • “We are seeing delays in projects starting for solar development.”
  • “Mixed demand - some up, some down.”
  • “A demand spike in the domestic U.S. during Q1 2020, followed by a steep decline in April.”

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Changes in International Demand Across Industrial Sectors

*Participants selecting ‘Other’ do not serve international customers.

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II. 2020 Business Shutdown Orders’ Impact on Manufacturing

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Most Manufacturers Are Considered Essential Businesses

Other industries self-identified as architecture, AV equipment, chemicals, fashion, industrial consultancy, lighting, and printing.

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Nearly Two-Thirds of all Respondents Are Affected by the �Shutdown of Non-Essential Businesses...

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… But Not All Industries Are Equally Affected by Shutdown Orders

Transportation, automotive, construction, and agricultural industries are the worst-hit sectors.

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“Other” industries include chemical, engineering, consulting, environmental, hydraulics, pharmaceuticals, and robotics.

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How Is the Shutdown of Non-Essential Businesses Affecting You?

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  • “[Our] base business includes supplying Tier I and II with parts needed to manufacture frames. All customers in automotive are shut down.”
  • “We have many essential customers, but also many non-essentials. Their closures have reduced demand by at least 20-25% so far, with greater reductions expected.”
  • “Our products go into medical offices that are not supporting the COVID outbreak directly and have all but shut down.”
  • “One of our largest clients is a major hotel chain. This business has essentially come to a halt. We've picked up some work that addresses challenges that COVID-19 has presented but it's not enough to keep us going for long.”

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More Than Half of Surveyed Companies Have Not

Experienced Layoffs

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31% of Surveyed Companies Are Actively Hiring

What job titles are you hiring for?

(Visualization of the most common keywords)

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III. Moving Forward:

Coping Strategies &

Business Outlook

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*63% of total survey respondents answered yes to having applied for financial assistance - the above chart is a breakdown of what assistance they applied for.

**Other includes increasing lines of credits, applying for Federal Payroll Subsidy and Canadian Assistance Programs.

COVID-19 Relief Funds Are Critical to Recovery

60% of Manufacturers Applied for the Paycheck Protection Program*

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PPE, Metals, and Fabricated Materials Are Top Three Most-Needed Materials/Products to Stabilize Manufacturing Supply

*Survey participants are able to choose more than one answer. Therefore, total percentages may exceed 100%.

Percentage = Count of Responses/Total Respondents

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85% of Manufacturers Have Not Shifted Production to Focus on COVID-19-Related Suppliers and Materials

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Pivoting to COVID-19-related Products and Services:

Medical & Healthcare, Agricultural, and Automotive Taking Charge

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Of the Companies That Pivoted, One in Two Are Addressing COVID-19-Related Supply Chain Needs

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How Has Your Company Shifted Production?

  • “Producing more oxygen compressors.”
  • “We are adding a new product which provides negative pressure patient care to the medical industry.”
  • “Same market, but added product for respirator hardware. Sourcing new suppliers due to supply chain.”
  • “Increased the production of respiratory related products.”
  • “We have prioritized our business so that all medical related is highest priority. Our production has increased to supply disinfectant, detergents, and sanitizers.”
  • “We are offering 90 minutes free to help manufacturers of COVID medical products navigate the FDA’s Emergency Use Authorizations.”

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One in Four Manufacturers Considering Automation Due �to Outbreak

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Automation: Agricultural and Construction Leading the Pack

Food & Beverage and Transportation Follow Close Behind

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Increased Interest in Reshoring: 64% of Manufacturers Indicate �They Are Likely to Extremely Likely to Reshore in Future

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Reshoring Interest By Industry

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April 2020 COVID-19’s Impact on North American Manufacturers

Other industries self-identified as architecture, AV equipment, chemicals, fashion, industrial consultancy, lighting, and printing.

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Optimistic Outlook - 91% Believe Recovery Is Possible

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More In-Depth Feedback on Manufacturers’ Outlook

  • “Trade shows that we depend on to sell our products are not going to be possible for the near future. This is a big concern.”
  • “Pent-up demand will offset negative GDP growth when stay-at-home orders are eased or lifted, albeit not evenly distributed; we expect market winners and losers.”
  • “This is a big reset and it will make almost all business reassess how they operate. That will lead to changes, and while some suppliers will be affected, others will be able to take advantage of new opportunities. Businesses will prepare for the next pandemic.”
  • “This crisis is a wake-up call for American manufacturing. Either through strategic initiatives or government programs, products essential to strategic welfare of the U.S. (defense, pharmaceuticals, telecommunications, medical devices, etc.) will be brought back to the U.S.”
  • “Anticipating pent-up demand once things reopen. We are a robotic integration company; we expect more companies to implement automation in their facilities to prevent further business disruptions due to the current type of disaster.”
  • “Resilience and determination are the makers of this country and remain our best assets.”

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2020 Coronavirus’ Impacts on North American Manufacturers

Thomas provides the industry with relevant and timely information, like this report, through surveys and the immense real-time data we collect on Thomasnet.com® from over a million industry sourcing professionals who source on our platform daily.

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If you’re interested in future opportunities to contribute, please visit https://business.thomasnet.com/join-survey-panel or click the button below to sign up for the Thomas Industrial Survey Panel. You’ll be invited to join future surveys, webinars, and discussions with other thought leaders in your community regarding industry-specific subject matter and industrial talking points.

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Discussion

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Free Resources �from Thomas

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2020 Coronavirus’ Impacts on North American Manufacturers

Get new insights in our most recent survey report: May/June 2020 Thomas Report: COVID-19’s Impacts on North American Manufacturing

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New Insights

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Learn More:

Thomasnet.com/COVID19

Thomas COVID-19 Response System

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Over 2,000 North American suppliers signed up to expedite the delivery of critical supplies and services.

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Learn More:

https://business.thomasnet.com/tmx

Thomas Industrial

Data

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Built with North America’s largest anonymized industrial sourcing dataset, TMX is one of most powerful financial and economic forward indicators to date.

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Subscribe for Free:

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Methodology &

Firmographics

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2020 Coronavirus’ Impacts on North American Manufacturers

This Thomas Industrial Survey was conducted over a 13-day period from April 16-29, 2020.

A total of 1,130 respondents participated and 878 responses qualified for the survey.

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INVITED PARTICIPANTS:

  • Qualifiers:
    • Complete, non-duplicate entry
    • Required to work in the manufacturing or industrial sector in North America
  • Recruitment:
    • Respondents were invited to participate via Thomas email. The invitation pool was incentivized with a copy of this report.

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RESPONDENT’S FIRMOGRAPHICS:

  • Revenue: Business revenues span from less than $4.9 million to over $500 million
  • Employees: Company size spans from less than 100 to over 1,500 employees
  • Business Descriptor: The majority of the respondents identify as OEMs and custom manufacturers
  • Headquarters Location: Identified by state/province

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SURVEY INFORMATION:

Methodology

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Respondents Are From Variety of Industries

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Respondents Are Mostly OEMS and Custom Manufacturers

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Company Size by Number of Employees

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Company Size by Annual Gross Revenue

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2020 Coronavirus’ Impacts on North American Manufacturers

Rita Lieberman

Director, Marketing Communications

Thomas

5 Penn Plaza

New York, New York 10001

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Email: rlieberman@thomasnet.com

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Contact

Information

Report Produced By:

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Cathy Ma, Director, User Acquisition

Rita Lieberman, Director, Marketing Communications

Mariah Hauck, Content Marketing Specialist

David Matava, Associate Creative Director

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Since 1898, Thomas has served as North America’s leading industrial sourcing platform and marketing powerhouse. We serve professionals on both sides of the industrial buying process to create solutions that inform, support, and empower industry.

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