Factories Facing “Severe” Labor Shortages In China, U.S. Business Group Says

Factories Facing “Severe” Labor Shortages In China, U.S. Business Group Says

By: Russell Flannery
Forbes, Feb. 17, 2020.

Some 78% of companies that participated in a new survey by the American Chamber of Commerce in Shanghai said they don’t have enough workers to run a full production line in the mainland.

Nearly half of the 109 companies — 48% of the total– from Shanghai, Suzhou, Nanjing and the Yangtze River Delta said their global supply chain operations have already impacted amid China’s deadly coronavirus outbreak. The survey was conducted Feb. 11-14.

“The biggest problem is lack of workers as they are subjected to travel restrictions and quarantines,” said Amcham Shanghai President Ker Gibbs in a statement. “Anyone coming from outside the immediate area undergoes a 14-day quarantine. Therefore, most factories have a severe shortage of workers, even after they are allowed to open. This is going to have a severe impact on global supply chains that is only beginning to show up.”

A lack of staff — 41% — was identified by respondents as the biggest challenge in the next two to four weeks, followed by logistics at 30%, Amcham Shanghai said.

Over the next few months, some 58% of companies expect demand for their output to be lower than normal, a sign that China’s economy will be hurt by fallout from the coronavirus outbreak, Amcham said.

China in the past three decades has emerged as a “factory to the world,” supplying global businesses from Apple to GM. The Wall Street Journal yesterday said in a story titled “Virus Disrupts Auto Supply Chain” that Nissan, Hyundai, Fiat Chrysler and Renault were facing problems getting parts from China. 

The Amcham Shanghai survey found that 38% of companies do not have sufficient masks and other supplies to protect their staff from coronavirus infection.


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