November 3, 2020 – Utah Industry Resource Alliance (UIRA), under CARES Act funding, released an in-depth economic study of the impacts of the COVID-19 induced recession on Utah’s manufactures:
Using Market Demand to Manage Production Levels:
COVID-19 Market Demand Analysis and Forecast for Utah Manufacturers 2021-2025
“The COVID-19 recession was sudden and steep.” according to economist Dr. Tulinda Larsen, Executive Director Utah’s Advanced Materials and Manufacturing Initiative and author of the study. “Utah’s manufacturers can expect a return to growth may take 2 to 3 years, but Utah manufacturers exhibit the resiliency required to rebound from the impacts of the COVID-19 pandemic.”
The study found a clear dichotomy between Utah manufacturers who are facing steep sales declines and those who are not able to keep up with demand. For example:
- Commercial aerospace manufacturing and oil production companies are facing steep declines. Hexcel just announced year-to-date sales have decreased by 32.6%. Oil manufacturing dropped by 54% since the pandemic began.
- Businesses, such as brick manufacturing, can’t keep up with demand.
The study considered three economic scenarios based on GDP growth:
Low—Significant 2nd wave, no vaccine available, infection rates continue to increase;
Expected— Vaccine found but not widely available, no 2nd wave, infection rates stabilize, society lives/works with virus;
High— Vaccine widely available, no 2nd wave, infection rates decline, society adapts to virus.
UIRA expects the economic return to growth in four phases: Containment, Recovery, Reset, and Growth. Under the low scenario, sales would not return to pre-pandemic levels until 2023. However, under the high scenario, a return to pre-COVID sales volume could happen as early as 2021.