The March 2020 reading of 41.0 was the lowest reading in the GBI’s history which dates back to late-2011.  The promising figures recorded in January and February hinted that a manufacturing rebound was at hand after a soft second-half of 2019.  February’s data, in particular, seemed to suggest a nascent recovery was beginning to take root.  This sanguine outlook was before COVID-19 forced much of the economy to close.  The effects have been acute, supply chain deliveries have slowed while new orders and production activity have sharply contracted. 

It is highly unusual to experience a combination of slowing supplier deliveries and weakening orders.  More often it is the situation that supplier deliveries slow when demand for resources is high and upstream suppliers are simply unable to meet strong demand, forcing a slowing of deliveries.  It is for this reason that the index reading for supplier deliveries increases above 50 when deliveries slow.  In the present case, with much of the world’s economy being hindered by the global response to COVID-19, the data rather reflect the severity of the disruption to both global and domestic supply chains.  For this reason, the elevated supplier deliveries reading is misleading under current conditions.

Although the data in March was overwhelmingly grim, there were several positive notes in the data starting with the overwhelmingly positive data from the plastics industry.  Plastics and rubber processors reported expanding activity across every measure of business activity. Survey results pointed to expanding production and new orders activity.  March marked the first time in recorded history that this group reported expanding activity among every measure of business activity. 

Lastly, survey data from additive manufacturers reported nearly unchanged production activity from February to March while new orders contracted only slightly.  As the world battles COVID-19, the use of additive manufacturing has received heightened attention worldwide for its ability to produce critically needed parts on-demand thanks to its minimal supply chain. 

The decline in the GBI—representing all survey respondents—was led lower by contracting new orders activity followed by production, backlogs, exports and employment.  Specific manufacturing technologies reported significant decelerations in overall business activity as well, with composites fabricators reporting the most dramatic deceleration followed by products finishers, metalworking job shops and molders.  Manufacturers of all size categories reported decelerating activity with only a narrow spread separating these results.  Small shops with under 20 employees reported only a modestly faster deceleration in business activity as compared to those with over 250 employees.

Gardner Intelligence will do its utmost in the foreseeable future to provide regular and informative updates on the state of manufacturing in light of the challenges posed by COVID-19.  March saw the greatest number of manufacturers respond to the GBI since early 2017.  Gardner cannot thank our survey participants enough for their insights and support.  We hope that you will continue to let us know how you are faring.  Only through your participation will we be able to gauge when this difficult hour will pass and when we will see the dawn on the horizon.  We would encourage our followers and publication subscribers to regularly visit our website blog and connect with Gardner Intelligence on LinkedIn and see our YouTube Channel.

**CORRECTION:  A previous version of this article cited Custom Processors rather than Plastics and Rubber Processors.**