The picture for manufacturing is grim. New orders and production are flat, employment is down and inventories are falling because of delayed shipments of raw materials and components from sourced in Asia. Those woes are particularly acute for the electronics industry, but are also a problem in food, chemicals and fabricated metals. Expect disruptions to worsen this spring.
Supply chain breakdowns go beyond China. Businesses that source parts or materials from Southeast Asia are finding out that many of those suppliers depend on China for raw materials. One-third of Cambodia’s garment factories have shut down for lack of Chinese fabrics. Myanmar, Bangladesh, Thailand, Pakistan and other countries are experiencing similar China-related shortages. China’s factories should be humming again by the end of this month, but it’ll take longer than that to make up for lost production and restock inventories.
Meanwhile, certain consumer goods are getting scarce. Sporting goods, kitchen wares and other household goods in the $20 range sold on Amazon are especially affected. Some vendors that source from China are paying two or three times the normal price. Expect most businesses to hold off on big investments or M&A activity until the worst of the public health threat has passed and the logistical snafus ease.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
-
Do You Really Need That Wine Cellar?Home Features Wine cellars are a popular feature in high-end houses. Will installing one in your home increase its value, or would you be better off with a cheaper solution?
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
The Economic Impact of the US-China Trade WarThe Letter The US-China trade war will impact US consumers and business. The decoupling process could be messy.
-
AI Heads to WashingtonThe Kiplinger Letter There’s big opportunity for AI tools that analyze MRIs and other medical images. But also big challenges that clinicians and companies will have to overcome.
-
The AI Doctor Coming to Read Your Test ResultsThe Kiplinger Letter There’s big opportunity for AI tools that analyze CAT scans, MRIs and other medical images. But there are also big challenges that human clinicians and tech companies will have to overcome.
-
The New Space Age Takes OffThe Kiplinger Letter From fast broadband to SOS texting, space has never been more embedded in peoples’ lives. The future is even more exciting for rockets, satellites and emerging space tech.
-
Rising AI Demand Stokes Undersea InvestmentsThe Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
-
What DOGE is Doing NowThe Kiplinger Letter As Musk's DOGE pursues its ambitious agenda, uncertainty and legal challenges are mounting — causing frustration for Trump.
-
A Move Away From Free TradeThe Letter President Trump says long-term gain will be worth short-term pain, but the pain could be significant this year.
-
Trump’s Whirlwind Month of Crypto MovesThe Kiplinger Letter The Trump administration wants to strengthen U.S. leadership in the cryptocurrency industry by providing regulatory clarity.
