US manufacturing tumbles as industry shutdowns exact toll

American manufacturers are trying to comply with social distancing guidelines, with mixed results (AFP Photo/Angela Weiss)

Washington (AFP) - US manufacturing activity declined in March as the coronavirus caused businesses to shut down and disrupted supply chains, according to an industry survey released Wednesday.

The Institute for Supply Management already warned of trouble for factories in February with the virus disrupting Asia supply chains, and as the pandemic struck the United States in recent weeks, the ISM manufacturing index declined to 49.1 percent in March.

That was better than expected but still below 50 percent, indicating the sector was contracting, and worse is expected in coming weeks.

"I've never seen anything move as quickly as this," said Timothy Fiore, chair of ISM's manufacturing survey. "We haven't hit the bottom of this."

Manufacturing represents a small but symbolically important share of the world's largest economy, but the sector struggled throughout 2019 due to President Donald Trump's multi-front trade war, particularly the damaging confrontation with China.

The coronavirus pandemic has rewritten the rules of the American economy and seems set to continue for weeks, if not months, and perhaps kills hundreds of thousands of people.

ISM compiles survey responses throughout the month, with most responses given near the end, and Fiore said as March went on respondents sounded increasingly bleak.

"The comments coming in at the tail end of the open period were definitely less positive," he said.

And even those did not account for the most-recent developments, such as retail chain Macy's decision to furlough most of its employees announced earlier this week.

Factories have implemented social distancing guidelines advising people to stay fix feet apart, to varying degrees of success.

Hit by slumping travel demand amid border closures and flight cancelations, the transportation sector was among the weakest in March, which Fiore said also was because assembling such equipment was "close work" where social distancing is a challenge.

"I don't think that's going to recover in the month of April," he said of the sector. "I don't know what I see... getting worse unless all the lights go out."

New orders declined 7.6 percent to 42.2 percent, and prices fell 8.5 percent to 37.4 percent, the survey showed.

Employment continued its contraction, falling 3.1 percent to 43.8 percent.