The Latest On Coronavirus, Its Impact On The Economy And The Industrial Metals Sector
As readers certainly are aware, the coronavirus has rattled markets, lawmakers, health officials, and the industrial metals industry. Last week culminated in an announcement by the World Health Organization (WHO) that it was raising its risk assessment of the coronavirus to the highest level of concern in terms of spread and impact. The WHO’s Mike Ryan said the announcement only was meant to serve as a “reality check” to get governments to prepare, but the novel virus has now reached at least 49 countries and, according to CNBC, could impact as many as five million companies worldwide.
According to a Thomas survey, about two out of every three North American manufacturing companies, 60 percent, say they are already feeling the disruptions caused by the recent coronavirus outbreak on their production facilities and supply chains. Overall, 34 percent of North American manufacturers said they expect business to decline, while 13 percent said they expect their business to grow as a result of this outbreak. The Federal Reserve Bank of Kansas City reported that more than 40 percent of manufacturers in its region estimate their business already has been hurt by the coronavirus outbreak, and more than 50 percent expect repercussions to continue through this year.
Additionally, the IHS Markit flash U.S. manufacturing purchasing managers’ index slowed in February to the weakest rate of expansion in six months. Respondents cited “delays in deliveries following the outbreak of the coronavirus in China,” which dampened sentiment and production.
The industrial metals sector is indeed already feeling the impact of the outbreak. The Wall Street Journal explained, “China is a key source of demand for [oil and industrial metals], so the early year slump in economic activity in the country as a result of the coronavirus has fueled projections for lukewarm consumption and excess supply.” Reuters columnist Andy Home warned, “Aluminum usage is highly exposed to the construction and transport sectors, meaning a double short-term hit to end-use demand” while MetalMiner also explored the potential impact on the metals industry.
Meanwhile, in another article The Wall Street Journal explained how the outbreak is threatening world supply chains while the Harvard Business Review explored how companies can prepare and protect their supply chain.
MSCI members seeking information about coronavirus and its impact are encouraged to visit:
- The Centers for Disease Control and Prevention’s (CDC) dedicated coronavirus webpage and Infection and Prevention Control Canada’s webpage.
- The CDC’s Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease, which can be found here.
- The National Association of Manufacturers coronavirus webpage, which can be found at https://www.nam.org/coronavirus/.
Like the WHO, Federal Reserve Chair Jerome Powell also weighed in at the end of last week, saying the coronavirus “poses evolving risks to economic activity” and that the central bank will “use our tools and act as appropriate to support the economy.”
Stay tuned to Connecting the Dots for the latest news and information related to coronavirus.