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As Coronavirus Reshapes U.S. Manufacturing, These are the Industries Reporting Growth

Posted by IndustrySelect on Thursday, April 9, 2020


As coronavirus continues to reshape the U.S. manufacturing sector at breakneck speed, sales and business development executives are left wondering which industries are most likely to need their goods and services.

Multiple economic reports point to a contracting manufacturing sector, yet some industries are busier than ever.

This article will explore some of the potential growth industries as the nation’s industrial sector transforms into a coronavirus-fighting machine, gleaning some key insights from the latest reports on manufacturing. These are the manufacturers that may potentially need services such as staffing, software, financial, transportation, janitorial/maintenance and more.

Critical Infrastructure Manufacturers: Open for Business

As we detailed in a previous post, there are numerous U.S. manufacturing industries deemed “critical” by the federal government, and a wide range of manufacturers fall into this category, including food manufacturing companies, chemical products; construction equipment manufacturers; and aerospace suppliers.

These industries encompass thousands of manufacturers. According to IndustrySelect's database of 400,000 U.S. manufacturers, food products manufacturing alone accounts for 22,485 U.S. companies.

These are the manufacturers that are potentially operating at higher capacity than normal right now and many are in need of new products and services.

Medical Equipment Manufacturers in Overdrive as U.S. Doubles Down on DPA

In recent weeks, all eyes have been on medical equipment manufacturers and related suppliers that produce the personal protective equipment (PPE) and medical equipment needed to combat the virus.

Last week, President Trump invoked the Defense Production Act (DPA), to ensure medical device companies like 3M and Medtronic get the resources and supplies they need to expand production of lifesaving equipment.

Other companies impacted by the DPA are General Electric, ResMed, Phillips and Vyaire Medical.

In addition to the large medical equipment manufacturers, new supply chains have coalesced around the parts and components needed to make ventilators, personal protective equipment (PPE) and medical supplies. Additionally, a growing number of manufacturers have overhauled their facilities to make face masks and shields, surgical gowns, hand sanitizer and more. You can read about just a few of them here.

These Industries Reported Growth in March: ISM

According to data released at the start of the month, U.S. manufacturing activity retreated into contraction in March, with the index falling to 49.0% (any reading below 50% is considered contractionary). This is following a hopeful start to the year in which the index rocketed back into expansion territory.

In March, new orders, production and employment all took a hit, as did imports and exports.

Notably, however, there were a few key industries that bucked the contraction trend.

In fact, ten of the eighteen industries surveyed by the Insititue for Supply Management (ISM) reported growth in March, even as the coronavirus outbreak intensified.

The growth industries, listed in order, were

• Printing & Related Support Activities
• Food, Beverage & Tobacco Products
• Apparel, Leather & Allied Products
• Wood Products
• Paper Products
• Chemical Products
• Computer & Electronic Products
• Primary Metals
• Miscellaneous Manufacturing
• Plastics & Rubber Products

Not surprisingly, comments from executives were overwhelmingly negative, with COVID-impact wreaking havoc on global supply chains. Yet, those who were positive, were remarkably positive. Said one executive in the food, beverage & tobacco products industry: “We are experiencing a record number of orders due to COVID-19.”
Those posting a decline were listed in this order:

• Petroleum & Coal Products
• Textile Mills
• Transportation Equipment
• Furniture & Related Products
• Fabricated Metal Products
• Machinery

Hopeful Manufacturing Output Report Shines Spotlight on These Industries

With some industries in overdrive and others at a standstill, it’s hard to predict how overall industrial production will fare in the short term.

According to the Federal Reserve’s last report on industrial production, however, the sector had at least started off on a positive note prior to the coronavirus crisis taking hold.

Manufacturing output increased 0.1% in February, according to the Fed, helped by a 3.5% rise in transportation equipment.

The Fed also reported an increase in electronics, apparel & leather and food processing output.

Manufacturing Labor Holds Steady in These Industries

With a staggering 10 million Americans filing for unemployment as of April 2nd, March’s labor report did not surprise, with the nation losing more jobs than it had gained for the first time since 2010, shedding 700,000 jobs altogether. What did surprise was that manufacturing job losses for March were fairly negligible, with the sector shedding 18,000 workers or about 0.1% of its workforce.

In fact, the DOL found a few manufacturing sectors added jobs in March, namely computer and electronic products; semiconductors and electronic instruments.

Notably, these sectors were among those severely impacted by supply disruptions as COVID-19 brought production to a halt in China, suggesting some manufacturers may have brought production back to the U.S.

We’ve yet to see what April will bring for manufacturers, but while many industrial companies have shuttered their doors and idled production, others are busier than ever.

It is possible the U.S. manufacturing sector may not fare as badly as other sectors.

At the tail end of 2019, U.S. manufacturers were already reporting a shortage of workers, with the DOL reporting 500,000 open positions as a persistent skills gap and tight labor market plagued the industry. Looking ahead, critical infrastructure and other growth industries may be looking to add staff.

Reach Manufacturing Executives in Key Industries with IndustrySelect

We hope this article will help you zero in on the manufacturing companies that may be in need of your products and services.

An IndustrySelect subscription provides instant access to nearly 500,000 U.S. industrial companies and one million executives. Powerful functions let you build and save lists of prospects based on industrial subsector, geographic data, company size and more.

Each manufacturer in IndustrySelect's live database contains up to thirty detailed facts, including direct executive email.

Learn more about IndustrySelect's database subscription or try out a free demo.











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