Today’s Pickup: Industry production sees its biggest monthly fall since World War II

Industry production sees its biggest monthly fall since World War II (Photo: Flickr/Alex Liivet)

Good day,

The large-scale closure of restaurants, factories, storefronts and mines has hit the U.S. economy severely, as people reduced their retail spending by a seasonally adjusted 8.7% in March month-on-month, making it the biggest decline in records going back to 1992. Sales at clothing stores were particularly hard hit, dropping over 50%, followed by a double-digit fall in the sales of automobiles, furniture, electronics and sporting equipment. Industry production fell by a seasonally adjusted 5.4% in March, which happens to be the biggest monthly fall since 1946. Manufacturing output, a vital part of industrial production, dropped by 6.3% in March – numbers unseen since the end of World War II. 

Did you know?

The International Energy Agency projected that demand for crude oil would fall by 29 million barrels a day in April, sinking to levels not seen in the 21st century. This decrease would equate to roughly 29% of the world’s daily oil-demand figure in 2019, which stood at 100 million barrels.


“We’re beginning to see an increase in certain customers reaching out to discuss liquidity concerns, and while we understand their liquidity issues, we have to enforce our terms that we have agreed to.”

– John Kuhlow, J.B. Hunt’s interim CFO, commenting on the issues with shipper customers struggling to pay their freight bills.

In other news

Many shale companies are already on the brink of bankruptcy

OPEC may have reached a deal to cut 10 million barrels per day, but for many U.S. shale producers, it is too little, far too late. (Oilprice)

Automakers will need months to get factories up and running

Suppliers face cash squeeze amidst an explosion of stay-at-home orders. (Bloomberg)

Dutch Hyperloop plan eyes Paris to Amsterdam in 90 minutes

Proposals to create the Hyperloop network are under discussion in the Netherlands after a study that says the high-tech link could be economically viable. (CNN)

IATA sees two possible exits from current crisis

The most likely is a V-shaped recovery lasting over the next few years, which would indicate a potential $90 billion in gross revenues. (Simple Flying)

Divided supply chains are challenging producers, retailers

Coronavirus-driven market upheaval has companies struggling to bridge a gap between industrial- and consumer-focused distribution channels. (WSJ)

Final Thoughts

In a PwC-led survey of over 300 CFOs of major companies, 39% of them are considering changes in their supply chains, as of the first week of April. However, with the Chinese manufacturing industry slowly getting back on its feet, near-term supply disruptions are no longer a big concern when compared to formulating long-term procurement plans post-pandemic. Companies have started to diversify their supply chains, a welcome change in stance from being dependent on certain geographic pockets for their supply. That said, these processes will take time as shifting supply chains across the globe needs precision planning. 

Hammer down everyone!