American factories in China are warning that they do not have enough staff to get their production lines fully back online as plants re-open after the extended coronavirus shutdown.
Nearly 80 percent of U.S. businesses in the Shanghai area say they lack the manpower to run at full speed, according to the American Chamber of Commerce in Shanghai. Forty-one percent said their biggest challenge in the next two to four weeks will be a lack of workers. Thirty percent said logistics issues will be their biggest concern.
The lack of staff raising the prospects of disruptions to global supply chains. The economic fallout from the coronavirus could include hits to production in regions, including the U.S., where the virus itself has been scarce but which are dependent on Chinese inputs for goods. China is one of the top three suppliers, alongside Canada and Mexico, of intermediate goods that go into final products produced in the U.S. It is likely the largest supplier of intermediate goods to the U.S. economy counting its exports to third countries that produce final goods sold in the U.S.
Here is what the American Chamber of Commerce’s survey, released Monday, found:
- 48% of companies report their global operations are already impacted by the shutdown
- 78% of companies do not have sufficient staff to run a full production line
- 41% of companies say a lack of staff is their biggest challenge in the next 2-4 weeks; 30% of companies say logistics issues will be their biggest concern
- Over the next few months, 58% of companies expect demand for their output to be lower than normal
- 38% of companies do not have sufficient masks/other supplies to protect their staff from coronavirus infection
- 35% of companies ranked a clearer explanation of requirements as the most important thing government officials could do to speed up factory opening approvals
China’s ruling Communist Party has ordered local officials to begin re-opening businesses and factories. But ongoing quarantine rules will make travel and returning to work difficult for many workers. Others may choose to stay away until there is reliable evidence that the outbreak is contained enough to make returning to work safe.