Indiana Manufacturers Could See Supply Slowdown Due To Coronavirus Outbreak

No cases of the new coronavirus have been confirmed in Indiana. But some businesses in the state are having to navigate potential parts shortages due to the virus’s impact in China.

Indiana is one of the top manufacturing states in the country, employing thousands of Hoosiers. The outbreak in China has slowed production of parts needed to assemble products including automobiles.

Ball State economist Michael Hicks says supply shortages are coming and could get worse over time.

“So this is already economic activity that is already not happened and is already going to impact the global economy," Hicks says. "As the disease spreads, there’s gonna to be two effects. One, is there is going to actually be you know continued quarantines and factories not producing. The second one is there is going to be a loss of workers that are sick.”

Businesses had planned for lower production from China during the Chinese New Year in January, but some factories are still not up and running due to the coronavirus outbreak in China.

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Scott Brand, Subaru of Indiana Automotive senior vice president of administration and quality control, says the cars assembled in Lafayette do use some parts made in China, but the supply slowdown hasn’t affected the plant just yet.

“We’re watching that pipeline very closely,” says Brand. “Some of those items that are more of a commodity that made in the Wuhan region are now becoming a little bit more challenging. The suppliers there are trying to get their production restarted. We’re trying to use other means of transportation like air freight to make sure we protect the component manufacturing for us. But really, it’s a day-to-day watch for us to make sure we can keep the parts flowing.”

Hicks says other industries in the state – including medical and pharmaceutical companies – could see an uptick in demand due to the virus.

Last year Indiana imported more than $7 billion worth of goods from China.

Contact Samantha at shorton@wfyi.org or follow her on Twitter at @SamHorton5.