New orders and employment tumbled in March at the quickest speed since 2009, signaling a tough road ahead for U.S. manufacturers.

March’s Institute for Supply Management’s report on business declined to 49.1%, an indication of contraction for the U.S. economy. The index, based on a survey of U.S. manufacturing companies, was down a percentage point from February, with the supplier deliveries index keeping the ISM higher than anticipated as it increased by 7.7% to 65% from the previous month. In contrast, the new orders index tumbled by 7.6% from the previous month to 44.2%. The employment index decreased by 3.1% from February, registering at 43.8%.

“The only indicator that went up was supplier deliveries, that means it’s taking longer for suppliers to make deliveries. Normally, when that goes up [it means] suppliers are busy, a sign they are growing. In this case, it’s probably because of supply disruptions related to coronavirus,” said Jay Bryson, economist at Wells Fargo.

As the global economy grapples with COVID-19 and the trade wars on oil prices continue to rage with no end in sight, the worst is yet to come for U.S. manufacturers. While the ISM registered better than what economists expected, factoring out the supplier deliveries’ misleading jump would mean the Index was closer to 41.1%, a sign the plunge was steeper than the ISM’s headline. 

The hardest hit industries were petroleum and coal products, textile mills and transportation equipment. Overall, demand for durable and capital goods slowed as consumers’ and companies feared they would not be able to make future payments. 

Manufacturers for transportation equipment took one of the hardest hits as the virus shut down many companies that would normally be moving products across the country. Although the increased demand for essential products such as food, beverage and paper products should have kept the demand for transportation afloat, more customers have closed down than production has ramped up.

Energy market volatility plunged demand for products and parts that service oil fields, such as trailers, fracking rigs, and steel and metal fabrications. 

Daman Leal, a broker from DKL Transport, a company that supplies turnkey solutions for transportation has witnessed the drop in demand first hand with the reduced number of requests for transport. This time of year, Leal often works on over 100 leads a week, this time around that number dropped to about 20.

“This is the season for transporting where we see an increase of four- or five-fold from off season, beginning at the end of March. We are just not seeing that now,” he said. 

Bryson expects things to get much worse before they get better. Under the current circumstances, the two leading indicators to watch out for are new orders and employment. The decrease in both those indexes suggests things will continue to drop in the coming months, even returning to its 2009 numbers where the index hit below 35%.

Garland Hutson, manager at CM Truckbeds, a company that supplies bodies for trucks is worried about laying off employees.“Everybody is going to be affected if it doesn’t improve within the next 60 days. If the trucking industry is hit, if it comes to a stop, the country comes to a stop, there’s no question about that.” 

Since flatbeds are typically used to move durable and capital goods such as building materials and farming equipment, CM Truckbeds is feeling the direct impact. “Economists need to drill down into employee’s hourly [cuts] because that’s where everybody is being impacted, from the dispatcher to the truck driver,” said Hutson. 

CM Truckbeds is one of the few businesses that remains an essential service but with the constant shutdown of other businesses, they are operating on a day-by-day basis, with no projection of what tomorrow’s demand will look like. For Hutson’s company, if business doesn’t pick up by May 1st, the year’s projected sales target would not be reached. If things continue for another couple of months, the company may not even be around. 

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