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    How will the Coronavirus impact manufacturing?

    The new outbreak of Coronavirus could cause more than just global health impacts. 

    It could actually affect economics and manufacturing around the world. 

    Here are a few reasons why.

    Factory Shutdowns

    Manufacturing between North America and China is very connected. 

    Factory shutdowns there could undoubtedly impact manufacturing here. 

    These factories could be shutting down or slowing down for a variety of reasons. One could be that due to quarantine restrictions their employees that left for the Lunar New Year can't make it back to work for a while. If they were able to come back, depending on the location they could be quarantined for weeks before allowed back at work. 

    Due to all the recent holiday travel throughout China this could happen in many areas of the country, not just the Wuhan area. 

    Even if just a small part of a product is manufactured in China, overall production elsewhere could slow significantly or to a halt without those parts. The Wall Street Journal said, "Even manufactured items with a very marginal quantity of Chinese content will be affected as production is halted, and the increasing complexity of products means replacing specialized manufacturers is difficult."

    History

    If we look back at events in history, we can clearly see the effects of SARS and similarly the 2011 earthquakes in Japan. 

    The potential fallout from this Coronavirus could be even more significant. 

    China has over twice the global merchandise export shares now than it did when SARS was a problem back in 2003. Additionally, global manufacturing as a whole has become even more connected.

    You can learn more by watching a video by the Wall Street Journal below. 

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