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Latest on outbreak The WHO reported more than 1,350 people have died from the coronavirus with 60,000 infected worldwide as of Thursday, February 13th.  570 cases have been confirmed within 25 countries outside of China since the virus went global. 

 

Labor force slow to return Provinces near Wuhan which was the epicenter of the outbreak are struggling with labor as workers that left the province to celebrate the Lunar New Year face a daunting task to return.  The graph illustrates the significant decrease in labor migration returning to factories compared to 2019 in Guangdong Province and Shanghai Area.

 

 

 

North China Production Recovery – Factories were allowed to open on Feb. 10th in most provinces however most won’t open until Feb. 17th or Feb. 24th.  The delay is mostly due to less than 1/3 of factories didn’t receive approval from local authorities which requires companies to achieve anti-virus qualification.  The qualification includes workers having sufficient masks and qualified dormitory conditions.  Expectations on product recovery remain fluid however current estimates are 80% by the first week of March. 

 

Central China Production RecoveryFactory output in Shanghai province is less optimistic with many remaining closed until Feb 17th or Feb. 24th.  Large manufacturing companies are in better shape in regards to labor however the same anti-virus qualification approvals by the local government are required to open.  The best guidance is for recovery to 80% or above not until Mid-March or later depending on how the virus containment situation unfolds. 

 

South China Production RecoveryFactories returned to work on Feb. 10th in Fujian and Guangdong provinces however similarly to Central China small and medium-size factory production will not resume until the end of February.  Reports reflect slower production recovery out of South China than Central & North.  Highway closures and restrictions are major contributors along with many local government restrictions on when factories can open with some not allowed until March 1st

 

China Truck Capacity Trucking shortage will be a major problem until at least the end of February due to transportation restriction and driver shortages.  Drivers arriving from rural areas need a mandatory 14 day quarantine period which will limit factory production as drivers can’t freely move between provinces.  Shippers are reporting product is ready for transport however due to labor shortage on drivers the freight can’t be delivered to consolidation warehouses or ports. 

 

 

 

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