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Supply
Chain by the Numbers |
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- Nov. 2, 2022
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Foxconn Workers Locked in to iPhone Factories; More Predictions for Reshoring to US; US Purchasing Manufacturing Index almost in Contraction; Wage Hikes Soaring |
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20,000 |
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That is how many workers there are reported to be at contract manufacturing giant Foxconn’s vast facility in central China, where Apple iPhones are made. Since mid-October, Foxconn has been wrestling with a Covid-19 outbreak at its facility in Zhengzhou, the capital of Henan province. Workers were locked in to stop the spread of the coronavirus to the outside world, as the Chinese government continues to take draconian measures every time even a small outbreak of Covid cases is seen. The tactics are a major factor in China’s slowing economic growth and the supply chain disruptions seen for many products. Workers at the plant are said to be forced to work if they test negative for Covid, but they cannot go home after their shifts are finished, sleeping and eating in the plants. |
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| That was the level of the US Purchasing Managers Index for October, as released this week as every month by the Institute for Supply Management. That was down 0.7 percentage point from the 50.9 score recorded in September, and marks the fifth straight month of a decline in the measure. The 50.2 level was also just barely above key 50 mark that separate US manufacturing expansion from contraction. The important New Orders Index contracted for the second consecutive month in October, registering 49.2, below the key 50 mark, in a bad sign for future US manufacturing activity. That was, however, an increase of 2.1 percentage points compared to the 47.1 reported in September. |
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7.7% |
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That was the year-over-year increase in wages for workers remaining in their positions, according to the ADP National Employment report released Wednesday. Wages hikes for those switching jobs rose at almost double that rate, soaring 15.2%. These wage pressures are obviously a key factor in still high rates of inflation, as the job market remains strong despite other signs of a wobbling economy. Private employment increased by 239,000 jobs last month. However, the manufacturing sector lost 20,000 jobs in the month. There were 10.7 million job openings at the end of September, with roughly 1.9 openings for every unemployed person. |
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That’s the share of US manufacturers that started reshoring or near-shoring of their production capacities, according to a new report issued this week by Deloitte. The survey included 305 executives at transport and manufacturing firms, mostly in the US, with annual revenue of $500 million to more than $50 billion. American firms are expected to reshore almost 350,000 jobs in 2022 -- an increase of 25% from 260,000 in 2021, according to figures cited in Deloitte’s ‘Future of Freight’ report. Ultimately, the shift could reduce by 20% the share of Asia-originating shipments to the US by 2025 and by 40% by 2030, it said. SCDigest says we’ve heard these kind of predictions for widespread reshoring before and it never materializes – we’ll see if its different this time.
