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updated: 6/30/2020 3:41 PM

Survey: Illinois manufacturers resilient through pandemic

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  • Ford employees work on a Lincoln Aviator and Ford Explorer lines at Ford's Chicago Assembly Plant in Chicago last year. Despite layoffs, supply chain disruptions and closures from the COVID-19 pandemic, most manufacturers in Illinois are rebounding, according to a new poll.

    Ford employees work on a Lincoln Aviator and Ford Explorer lines at Ford's Chicago Assembly Plant in Chicago last year. Despite layoffs, supply chain disruptions and closures from the COVID-19 pandemic, most manufacturers in Illinois are rebounding, according to a new poll.
    AP Photo/Amr Alfiky 2019

 
By Cole Lauterbach
The Center Square

Illinois manufacturers reported layoffs, supply chain disruptions, and closures from the COVID-19 pandemic, however, most are rebounding, according to a new poll.

The Federal Reserve Bank of Chicago's Survey of Business Conditions interviewed hundreds of manufacturers in Illinois and Michigan between May 20 and June 5.

Many manufacturers were deemed essential through the spring closure orders, with some ramping up production of pandemic-fighting products. Others, including auto manufacturers, closed temporarily. Nearly all respondents to the survey reported revenue losses.

Seventy percent of respondents said their facilities never shut down during the pandemic. Of those that did halt operations, 28 percent said the closure was temporary. Another two percent said they closed for good.

"Every manufacturing job in Illinois creates 1.6 jobs and every dollar invested in manufacturing leads to $1.89 in economic output," said Mark Denzler, president of the Illinois Manufacturing Association. "You're losing good middle-class jobs that pay about an average of $80,000 a year in wages and benefits."

Those closures, Denzler said, also represent disruptions across a supply chain, something a National Association of Manufacturers survey said more than one-third of companies are experiencing.

"I think we're going to see some companies look to ship their supply chains back to the United States or diversify so that, if a supplier in Asia or Europe gets shut down, it wouldn't shut down the entire supply chain," Denzler said.

Most of the companies said they had made efforts to keep a line of communication open between their furloughed or laid-off workers in hopes of bringing them back to work.

"Regardless of their answers, respondents expressed uncertainty about whether they would be able to retain workers, indicating that it depended on the demand for work and on the broader economy improving in the future," the poll authors said.

Economists have predicted the "coupling" of workers to their former jobs would prove crucial to a quick economic recovery.

Three of every four manufacturers expect the economy to feel the effects of COVID-19 until the end of 2021.

The Fed took a similar poll of small businesses in Illinois and several states in May that showed a much more bleak picture for other sectors.