INDIANA — Indiana manufacturing could be in for a rough stretch thanks to the coronavirus.

There are still no cases of the disease reported here in the Hoosier state, but Hoosier manufacturing companies could feel the strain of what IUPUC economist Ryan Brewer calls a “supply chain disruption.”

Stocks plummeted on Wall Street last week over fears of the impact the coronavirus might have on the global economy. With so many people sick in China, fewer supplies coming over from China can make it more difficult for some factories to operate in the U.S.

Brewer tells Inside Indiana Business that it could cause a recession.

“Manufacturing is what China does for the world, sort of the manufacturing basket of the world, and that’s the epicenter of the coronavirus,” Brewer said. “It could be that a lot of supply chains are shocked. I think that’s what markets are afraid of right now.”

“If the virus lasts deep into the summer and is able to communicate and spread around in the hot summer months as well, that’s when we see the wheels start to fall off the economy,” he added. “Disruption of a supply chain like this can take a long time to recover from.”

Brewer said it’s not like a typical recession.

Indiana imported $7.7 billion worth of goods from China last year. He said if Hoosier manufacturers continue to struggle to get parts and goods from China in order to make their products they might have to find another supplier, which he said is extremely difficult under these circumstances.

 

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