The novel coronavirus took its toll on the U.S. manufacturing sector and the broader economy in 2020. As the end of the year approaches, there are still many hurdles that need to be cleared. Of course, many experts are already reading the tea leaves for 2021 and, as one might expect, things appear to be a healthy mix of good news and bad.
The following are just some of the things manufacturing professionals should keep in mind as the new year approaches:
1) The recovery is already underway
Like most of the other corners of the economy, the manufacturing industry was rocked by the shutdowns necessitated by the novel coronavirus pandemic earlier this year, but things have been trending in the right direction for some time since, according to Trading Economics. While activity dipped almost 20% on a year-over-year basis in April — the first full month of COVID-19 shutdowns — that decline has softened in each following month, reaching an annual dip of 6% in September, the latest month for which data is available.
2) Trends still aren't great
Obviously, the fact that factory production is still down 6% from where it was in the same month last year — and in fact, the sector has seen annual declines for each of the last 15 months — isn't exactly a win for the industry, Trading Economics said. As such, leaders may need to do more to set themselves up for growth and success in the months ahead.
3) Experts project a strong economy
With the above trends in mind, it's important to note that economists largely see good prospects for an economic recovery at some point in 2021, according to S&P Global. That's a win for the global manufacturing industry, but it's not entirely clear what these numbers mean for the fortunes of American companies in particular.
4) Nothing is certain
Many of these projections were made before the coronavirus started to surge across the U.S. and in other parts of the world, so there is still a bit of a guessing game to be played, S&P Global added. Coronavirus cases are surging in many parts of the country right now and as such, any recovery on a national level could be muted as some regions fare better than others.
5) The COVID setback can't be ignored
While a small but growing number of companies may be getting back to something that at least resembles "business as usual," the industry as a whole probably won't hit pre-COVID levels of success at any point in 2021, according to Drives & Controls. Even the most optimistic projections for the global industry show 2022 as the most likely point at which activity finally starts to peek above 2019 levels. More realistically, that might not happen until 2024, simply because of how big the impact of the shutdown was for the entire sector.