MNI INTERVIEW: ISM: Half of US Factories Report Virus Concerns

By Brooke Migdon

     WASHINGTON (MNI) - Coronavirus fears among U.S. manufacturers spiked in

February, eclipsing tariff-related concerns and global trade disputes as the

most significant issue, ISM Manufacturing survey head Timothy Fiore told MNI.

     Nearly half of supply managers in February referenced coronavirus-related

concerns, up from 2.5% in January, with 18% of manufacturers currently

experiencing difficulties in daily operations and 24% expecting to face them

sometime in the near future. Shipping and other transportation issues rank among

the highest, according to Fiore.

     "We have not seen the peak of this thing yet," he said. "We're in the early

stages."

     The monthly ISM manufacturing index nearly stalled in February, falling 0.8

points to 50.1, just enough to call it an expansion. The near-term growth

outlook stumbled as an increasingly large number of respondents expect the

economic impact of the coronavirus to weigh heavily on U.S. manufacturing given

supply chain linkages with China where the virus originated.

     Fiore said measures taken by China and others to contain the virus are

encouraging, though he is pessimistic the "full story" is being told. Fiore said

he is wary of U.S. reports that the virus' spread in North America is under

control. Officials from the Centers for Disease Control and Prevention told

reporters last week that the U.S. should prepare for new cases nationwide.

     Still, Fiore said he is hopeful that the virus' spread will be curbed by

mid-April, and the beginnings of a potential global economic recovery could be

seen by the end of June.

     "If we get a handle on this thing in the next six weeks, we could probably

be expanding and growing again by the close of Q2," he said. "We can get the

supply chain humming again."

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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