Report Details Economic Impact of COVID-19 on Materials and Manufacturing Industry

Pete CodellaArticles, COVID-19

The Utah Advanced Materials & Manufacturing Initiative (UAMMI) recently released a report of the COVID-19 economic effects on Utah’s Advanced Materials & Manufacturing Industry. It included a summary of survey responses from over 140 companies recently contacted and interviewed by UAMMI team members. The survey assessed the economic effects and challenges the industry cluster faces and offers support to companies and guidance to recovery policymakers.  

“During this unprecedented time, we felt that it was important to contact Utah’s advanced materials manufacturing companies and hear first-hand how they are doing,” said Dr. Tulinda Larsen, UAMMI executive director. “It gave us great insight, and the companies appreciated the personal outreach during this Urgent Phase of the COVID-19 crisis. We plan to continue outreach as the Utah economy enters both the Stabilization and Recovery phases.”

Based on the results from UAMMI’s outreach to 144 Utah advanced materials and manufacturing companies, seven common themes emerged.

  1. Companies with large government defense contracts have been mostly protected. For those companies, production is stable and in some cases is increasing. However, all reported that they had to make workplace adjustments.
  2. Aerospace suppliers are continuing production, however, their future is uncertain.
  3. Recreational manufacturers had to pivot.
  4. Companies making PPEs cannot keep up with demand.
  5. Accounts receivable impacted cash flow.
  6. Projects have been delayed for nearly all companies.
  7. Receiving supplies, except for PPEs, has not typically been a problem, but there have been delivery delays.

Questions for customer demand were asked, with responses being nearly split between seeing no reduction in customer demand (47%) and seeing reduced customer demand (44%). Nearly 7% reported seeing an increase in customer demand.

What Businesses are Saying

The following are highlights of responses given in the report.  

Government contracts have protected defense contractors, production is stable and sometimes increasing. All had to make workplace adjustments.

  • Our business is classified as an essential service by the Department of Defense. We can’t reduce production. But we can’t find cleaning supplies, making things difficult. – Defense Contractor
  • Because of COVID-19, we have not been able to access our customer’s site, which is required by the contract. – Design and Failure Analysis Company

Recreational manufacturers have had to pivot.

  • Oil and gas-related projects have almost stopped with the big drop in oil prices. Recreation orders still going but delayed to later in the year for water sports. – Composites Manufacturer
  • Complete abrupt shutdown, not sure of the future. – Sunglass Manufacturer

Companies making PPEs cannot keep up with demand.

  • We pivoted to PPEs and can’t keep up with demand. – Composites Company
  • We have been making PPEs for decades, but now conflicting Federal regulations are making things difficult. We are not sure how we will meet the increased demand as things reopen. – 100+-year-old Manufacturing Supplier

Accounts receivable are impacting cash flow.

  • Demand and production are doing great, but payments have slowed. – Company providing composite based construction materials
  • While we have outstanding orders, our customers have asked for deliveries to delay and payments are on hold which affects payroll ability. – Advanced automation manufacturer

Read the full report here.