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Home » Watch: Signs That China Is Ramping Up Production
Video

Watch: Signs That China Is Ramping Up Production

May 8, 2020
Robert J. Bowman, SupplyChainBrain

PJ Bain, Chief Executive Officer of PrimeRevenue, reveals what insights can be gleaned about the state of global supply chains from a review of thousands of company invoices from around the world.

Manufacturing activity in China is coming back after weeks of shutdowns caused by the emergence of the COVID-19 virus in that country. But production levels have yet to equal where they were at the beginning of this year, Bain says.

January production in China was up 28% over the same period of 2019, just before the Lunar New Year holiday, which halts factory activity throughout the country for two weeks every year. As of mid-March however, China production was once more exceeding 2019 levels, and had been holding steady.

With the sharp economic downturn in the U.S., however, that raises questions about whether products being made in China will find a buyer, or even a place to be stored while importers await recovery in this country. The volume of orders began a slow decline over the month of March, then dropped by as much as 40%. “There was a very dramatic impact on orders that suppliers are receiving, and volumes across the platform,” says Bain. “It will take another few weeks for that to filter through the supply chain.”

On the positive side, he sees signs that the crisis is fostering an unprecedented spirit of collaboration between companies and trading partners, as individuals battle the deadly virus. “This is a unique time in the history of the world,” Bain says. “It has created a bit of esprit du corps. People are trying to figure out how to help each other survive.” And that appears to be filtering down to business transactions as well, with companies displaying “an openness to sharing information that makes all of us together collectively stronger.”

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KEYWORDS China Coronavirus Global Trade & Economics Sourcing/Procurement/SRM
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