Impact of COVID-19 on the Industrial sector
It is tough out there; everyone is concerned, business owners had not planned for a pandemic, (who knew we needed to). How has the pandemic affected you so far? What of our manufacturing industries?
As the COVID-19 crisis continues, many global industrial products companies face challenging times, including production stoppages due to supply chain disruption, cost escalation, and workforce dislocation.
For Kenya, it is no longer a matter of increasing the profit margin or improving the revenue collection for the Kenyan manufacturers in the business.
Our manufacturing sector has been looking at ways to reduce costs, retain their employees, and improve the cash flows.
Various manufacturers were left with no option but to seek ways to push down their agenda of growing their businesses in a bid to make it through the pandemic.
In a report by KPMG and the Kenya Association of Manufacturers, 78 percent of the manufacturers have been majoring in reducing costs, whereas 61 percent have been working to ensure they do not lay off their employees during this hard time whereas 53 percent were working to ensure there are adequate cash flows.
On employment, it has been hard for employees. The report indicates the sector laid off over 40 percent of their casual employees, whereas 17 percent of the manufacturers reduced their permanent workforce.
On the other hand, 91 percent of non-essential manufacturers have seen a significant decrease in demand for their products compared to 74 percent of essential goods manufacturers.
Globally, some major industrial companies have closed facilities and are mulling the extent of layoffs to help curb the spread of the virus and economic reasons.
Notably, the slowed economic activity has reduced demand for industrial products in the country and globally.
As the nation starts opening its economy, most companies already have business continuity plans. Still, those may not fully address the fast-moving and unpredictable variables of an outbreak, such as COVID-19. This brings about the question, will the sector be able to balance speed with compliance moving forward?
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