With COVID-19 Pandemic,cnc machining Orders Fell To The Lowest Point In 11 Years
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In April 2020, the US machining industry activity fell to its lowest level in 11 years, mainly due to the severe damage to the supply chain caused by the novel coronavirus epidemic. |
The Institute of Supply Management (ISM) said on Friday that the ISM machining industry purchasing managers index fell to 41.5 in April, down from 49.1 in March and the lowest level since April 2009. The index below 50 indicates a contraction in the machining industry, which accounts for 11% of the US economy.
According to the Supply Management Association, due to the impact of the novel coronavirus pandemic and the continued decline in the energy market, manufacturers have shown a strong negative attitude towards the near future.
Machining practitioners believe that the travel catering service industry has suffered a devastating blow and needs some time to rebuild, Fiori, chairman of the Supply Management Association, said in a conference call with reporters. For a long period of time, machining orders will be in a sluggish state.
The US government has taken strict measures to slow the spread of the new coronavirus. These measures have caused severe damage to the supply chain and almost paralyzed the economic activities of the entire country.
Economists interviewed by Reuters had predicted that the ISM index in April would fall to 36.9. However, the actual decline was smaller than expected, mainly because the supplier’s delivery index rose from 65 in March to 76 in April.
The extension of supplier delivery time is usually related to a strong economy and increased customer demand, which will be a positive contribution. However, in the new round of the epidemic, the slowdown in supplier supply indicates that there is no demand in the market, not an increase in demand.
Although economic activity has resumed in parts of the United States, economists don’t expect this to quickly reverse the economic recession. Some small businesses may go bankrupt, and there may be a second wave of new coronavirus infections.
Due to the sharp decline in orders, the machine processing plant cut wages last month. Last month, ISM’s factory employment index plummeted to 27.5 from 43.8 in March, the lowest level since February 1949.
This is consistent with the trend expected by economists, that is, the government employment report released next week shows that the number of unemployed in April will exceed 20 million, and the unemployment rate will exceed the post-World War II record of 10.8% set in November 1982. At present, the number of people preparing to apply for unemployment compensation publicly by the US government has reached 30 million.
Data released by the U.S. Department of Commerce this week showed that U.S. economic growth in the first quarter fell by 4.8% from the previous month. This was the first decline since 2014 and the worst quarterly contraction since 2008.
Brad Setser, an international economist at a US think tank, stated that this epidemic has dealt a serious blow to the US consumption-based economy. He predicts that the data in the second quarter will show a sharp decline in economic activity, even greater than the decline in the first quarter.
At present, the Chinese government has announced that the 13th National People’s Congress will open on May 22. The whole world is paying special attention to this meeting in China. They are especially looking forward to whether China will launch a 4 trillion plan to save the world like the 2008 financial crisis! Because China’s 4 trillion yuan in 2008 really pulled the world back from the cliff. There is no doubt that the world is the biggest beneficiary. China’s influence in the world has also greatly increased, but China has also harmed itself by saving the world. Therefore, whether the National People’s Congress China will launch a new economic stimulus plan again this time has become confusing. It is known that China’s plan to launch special treasury bonds reported by the media in April was also shelved because of the negative attitude of China’s top elites towards the 4 trillion yuan in 2008. All kinds of factors predict that the next year or two will be a cold winter for various industries.
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