Effect on manufacturing by COVID-19 pandemic reported to be mixed bag

A study of the effects of the COVID-19 pandemic on Utah’s advanced materials and manufacturing industry reveals a mixed bag of results.

While 47 percent of survey respondents said they have seen no reduction in customer demand, 44 percent said demand has shrunk and nearly 7 percent reported increases. However, projects have been delayed for nearly all companies.

Among other results of the survey of 144 companies by the Utah Advanced Materials & Manufacturing Initiative (UAMMI) are that that companies with large government defense contracts have been “mostly protected” from the virus’ impacts, aerospace suppliers are continuing production despite an uncertain future, recreational manufacturers have “had to pivot.”

Among those with large government defense contracts, “production is stable and in some cases is increasing,” UAMMI said. “However, all reported that they had to make workplace adjustments.”

Other common themes in the survey results are that personal protective equipment (PPE) manufacturers cannot keep up with demand; receiving supplies, except for PPEs, has not typically been a problem despite delivery delays; and accounts receivables have impacted cash flow.

UAMMI conducted the survey to assess the economic effects and challenges being faced within the Utah industry cluster and offer support to the individual companies, as well as guidance to recovery policy makers.

“During this unprecedented time, we felt that it was important to contact Utah’s advanced materials manufacturing companies and hear first-hand how they are doing,” said Tulinda Larsen, UAMMI executive director. “It gave us great insight and the companies appreciated the personal outreach during this ‘urgent phase’ of the COVID-19 crisis. We plan to continue outreach as the Utah economy enters both the ‘stabilization’ and ‘recovery’ phases.”

Regarding production, more than half of survey respondents have not made any adjustments in response to demand changes. However, of the companies that are facing reduced customer demand, they have been forced to reduce production, lay off workers and, in some cases, even shut down. For most companies, customer payments have also slowed and are impacting cash flow.

Manufacturing and operating supplies have also been effected. One-third of the companies reported facing reductions in supplies and nearly all reported reductions in cleaning supplies and other operational necessities. Many are also facing delays in deliveries and other uncertainties in the supply chain.

A link to the full report is at https://www.uammi.org/press/covid19-report.