Few industries were hit harder by the ripple effects of COVID-19 than the manufacturing sector. Continued lack of natural resources and ongoing supply chain issues have innumerable repercussions for manufacturing centers around the globe. Some positive signs of improvement have begun to emerge, and the outlook for manufacturing is slowly looking stronger. Full recovery will take some time, as there are several key areas that must be redeveloped.
Manufacturing Center Shutdowns
Massive closures, whether mandatory or not, had a major impact on the manufacturing industry. Fabrication plants, warehouses, and logistics centers were all at a standstill during the pandemic. These unexpected closures wreaked havoc on front-end personnel and forced a halt to supply chains moving forward. The slow trickle led to a bottleneck that is just now in the process of reopening.
Transportation and Storage Woes
The constant demand for products from China has put excessive strain on the transpacific ocean transport industry. Shipping prices from Asia to the United States more than doubled since the onset of the pandemic. In addition to the exorbitant price increases, lengthy delays were inevitable. Bottlenecked cargo containers sat in wait as ports struggled to keep up with the flow of imports and exports. Many ports were further complicated by COVID outbreaks and forced to work with minimal staff. Some ports temporarily closed without warning.
Storage solutions are typically a year round booming business. Due to the various supply chain challenges and closures of busy overseas manufacturing centers, many storage facilities sat vacant. Limited inventory drove prices well beyond what a traditional market could bear. Pandemic related circumstances impacted manufacturing and storage facilities, all resources, and the general workforce.
Better Days Ahead
Although there is no insight into when the threat of COVID will subside, there is some good news ahead for the manufacturing industry. Supply chains are steadily reopening, and manufacturing centers are busy working their way back up to maximum capacity. Many industry experts anticipate a return to reliable output by early in the second quarter of 2022.
The elusive microchips that served everything from automobiles to video game systems are back in production and have begun to trickle into the marketplace once again. Agricultural products and services are also slowly returning to pre-pandemic levels. The transportation lines have increased routes and more drivers are returning to work in an effort to bring finished goods to end users.
Accurate Appraisal and Valuation Services
Manufacturers and agricultural leaders have been disadvantaged during the COVID downturn. Our team at Appraisal Economics continues to provide this community with comprehensive valuation reports that accurately capture external market forces.