Afternoon Coffee, coronavirus edition: PMI shows manufacturing slips; CFOs see altered supply chains; ‘We’re not running out of food’

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U.S. manufacturing activity contracted in March as effects of the coronavirus disruption take hold, according to ISM’s monthly PMI index that dropped 1 full point to 49.1 from 50.1 in February. Experts at the Institute of Supply Management survey a panel of industry leaders each month to gauge the sentiment and tell whether manufacturing is expanding (a reading above 50) or contracting (below 50).

"Comments from the panel were negative regarding the near-term outlook, with sentiment clearly impacted by the coronavirus (COVID-19) pandemic and energy market volatility. The PMI returned to contraction territory, and with a negative trajectory,” said ISM’s Timothy R. Fiore, who runs the PMI survey.

Concern about plummeting oil prices also was heard from the panel. Here are some anonymized comments from the industry leaders included in the PMI report:

  • "The two main issues affecting our business [are] COVID-19 and the oil-price war. We are in daily discussions and meeting constantly, updating tracking logs to document high risk concerns." (Chemical Products)
  • "COVID-19 impact has extended to Europe and North America. The virus escalation is affecting our purchasing and logistics operations. We have incurred air-shipment and production interruptions due to shortages of raw materials and components." (Transportation Equipment)
  • "We are experiencing a record number of orders due to COVID-19." (Food, Beverage & Tobacco Products)
  • "We have lost supply chain visibility to certain locations." (Petroleum & Coal Products)

CFOs expect COVID-19 to alter supply chains

A new survey by PwC has shown CFOs of companies saying their supply chains will change because of the pandemic, according to Supply Chain Dive.

The survey of 50 CFOs, mainly from U.S. Fortune 1,000 companies, showed supply chain issues were among the top-three concerns for roughly one-third of the CFOs. A majority of the CFOs also expect losses in productivity over the next month, as well as staffing changes due to slowed business, but only 16% predict mass layoffs.

Tesla offers to deliver ventilators for free using its logistic network

Elon Musk's Tesla has extended a previous offer to manufacture and deliver ventilators to countries suffering from shortages.

The Tesla CEO said the equipment would be given free to any hospital with the electric car company's delivery regions, reports the Independent.

Reasons why American grocers will not run out of food despite pandemic

Despite a run on grocery stores, experts believe that American grocers will not run out of supplies. This is because some of the measures the industry has taken so far, including allocations throughout the supply chain, reports CNBC. Some have even restricted consumers to a limited number of items such as beef and chicken. Also, some slower-moving products are put on hold until demand subsides.

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