Companies adapt better to Covid-19 after lessons learned from the spring outbreak

This fall, when infections increased again, Broadbent added another larger warehouse to allow employees to distance themselves and stay safe. The company, Greater Good Fresh Brewing Co., managed to send ingredients to make 50,000 liters of beer in one week.

“It was complicated, but nowhere near as complicated as the first time,” he said.

The resurgence of coronavirus infections across the West this fall represented a new blow to the global economy. But the impact is much less, in part thanks to lessons learned by companies, especially in manufacturing, about keeping workers safe and continuing to operate. The resurgence of East Asian economies, especially China, has also boosted many Western manufacturers.

In addition, unlike the peak of spring, disruptions in supply chains have been less frequent, as parts and raw materials continue to flow into factories.

The United States economy contracted 9% in the three months to June, partly due to a 15.8% drop in factory production in April. But the country’s factories have since recovered and increased their production by 0.8% in November. Economists hope that the continued recovery will help increase gross domestic product by 1% during the last three months of the year.

The British economy contracted almost a fifth in April compared to March. Manufacturing shrank a quarter, while service activity fell by almost 18%.

Earlier this year, “I was thinking it would be confined to China,” said Mr. Broadbent. “Most people were caught off guard. We managed to continue, but it was very slow. “

In contrast, last month, when the authorities imposed a national blockade, the National Institute for Economic and Social Research estimates that economic activity fell by 9.3%.

In response to the fall of autumn, officials in many Western countries have imposed new restrictions on entertainment and hospitality, while Europeans and Americans are wary of activities involving close contact. As a result, some service sectors are suffering as badly as they were in the spring.

In October, the production of British restaurants, bars and hotels fell 14.4%. But industrial production in the UK increased by 1.7%, reflecting the factories’ ability to adapt to the pandemic.

In France, while accommodation and food services were estimated to be 60% lower in November than last year, manufacturing was just 5% below the level of activity recorded before the pandemic.

The European Central Bank estimates that eurozone GDP will fall by 2.2% in the last quarter. In contrast, GDP fell 11.7% in the three months to June.

In March, as the virus spread across the United States, Stephen Bullock, president of a company that makes paving machines – which construction workers use to curb new housing developments – outlined four potential scenarios for the year, varying from very serious to optimistic.

In the following weeks, business fell and Power Curbers Cos. He began to demand masks, forbade employees to meet during breaks, and began to check the temperature on the door. The company cut production and some of the measures related to the coronavirus led to some declines in efficiency and productivity, he said.

“For the first two months, I no longer felt like I was in manufacturing,” said Bullock. “I was in Covid’s management business.”

But as the weeks passed, none of the employees fell ill and business began to return. Even amid the current increase in new cases at its headquarters in Salisbury, North Carolina, less than 10 of its 120 employees became ill.

The manufacturer is now on track to fulfill its most ambitious forecast, with new homes under construction recovering above pre-crisis levels.

“We know what we are doing now. We know how to react, ”he said. “Our production manager did a lot of juggling.”

In addition, for many manufacturers, export markets are more open than in the spring, a special bonus for markets in China and other parts of East Asia, where economies have already recovered or are close to doing so.

In October, Germany’s exports to China were higher than in the previous year, even though sales to the United States and the United Kingdom were much lower.

Paul Horn GmbH, a manufacturer of precision tools based in the southern German city of Tübingen, cut the working hours of its approximately 1,000 local employees by 20% to 60% in June, after a fall of around 50 % on new orders in April and May, said Christian Thiele, a company spokesman.

The company, which makes tools used to build medical devices, cars and airplanes, has been hit by a disruption in the big German auto industry and the civil aviation sector.

But after a strong recovery in new orders in September, the entire team returned to work full-time in October, said Thiele. Although exports to the United States are below the levels seen in 2019, the company has seen sales to China grow, especially to customers in the automotive and hydraulic sectors.

“December was surprisingly good,” said Thiele.

However, manufacturing is not entirely separate from the service sectors that are most affected by new infections and the restrictions they cause. Arthur Price is a British cutlery manufacturer that has been on the market since the beginning of the last century in Lichfield, a city about 200 kilometers north of London.

Most of its sales are to families and have been maintained thanks to online sales. Export markets in the United States, the Middle East, Russia and East Asia have also been a source of demand.

But a fifth of its sales traditionally go to hospitality companies, including many London hotels. When they were not closed or severely restricted in what they can offer to customers, they were hit hard by a breakdown in tourist and business visits.

“It would be a big help if the hotels came back and continued,” said Simon Price, who is part of the fourth generation of his family who runs the business.

Write to Paul Hannon at [email protected], Austen Hufford at [email protected] and Tom Fairless at [email protected]