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Coronavirus Fears Disrupt American Trade Show
and China's Supply Chain

Efforts to curb the spread of the Coronavirus outbreak include the temporary shutdown of factories in affected areas by Chinese authorities, causing world financial markets to fall because of fears of supply chain disruption and at least one US trade show has cancelled.

Chinese factory workers were sent home for much of February to curb the spread of Coronoavirus (image: Pexels.com)

The Inspired Home Show in Chicago has cancelled its March 14-17 show due to concerns over the spread of Coronavirus. The IHA show was to have taken place at McCormick Place. “After careful consideration regarding the ongoing spread of Covid-19 (Coronavirus) overseas and recent cases in the United States,” says the news release, “the International Housewares Association’s Board of Directors has decided not to hold The Inspired Home Show 2020.” The association had already cancelled its International Sourcing Expo, which primarily houses Chinese-based suppliers, due to travel restrictions (source).

In China, where the outbreak began, the manufacturing sector fell to 40.3 according to the purchasing managers index (PMI), a metric by the media group Caixin. Anything below 50 indicates a decrease in production; above 50 denotes an increase. The Chinese government reported its own PMI calculation was 35.7, down from 50 in January.

China's service sector fell to 29.6 PMI in January after a score of 54.1 in January (source).

In spite of the bad news, several manufacturers resumed production in February. Airbus slowly began ramping up, as well as General Motors on Feb. 15. Toyota followed on Feb. 17 (source).

“Manufacturers were faced with great pressure to deliver orders with insufficient operational capacity amid the impact of the epidemic,” wrote Zhengsheng Zhong, chairman and chief economist at CEBM Group, in a statement that accompanied the Caixin survey.

Economists from Societe Generale said the initial economic shock from the virus outbreak was worse than the downturn during the financial crisis of 2008. “At the same time, they are not totally surprising for an economy that was pretty much on a total pause for half of the month and was running at less than 50% of its capacity during the other half of the month,” the economists added.

In the US, the stock markets suffered great losses the last week of February, but early indications in March were that they would rebound. The Dow Jones Average closed up 1,293.96 points on March 2, to 26,703.32 points, the biggest one-day gain since 2009, then lost ground the next day.

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