Potential supply chain disruption due to the coronavirus worries local businesses, though they say they haven’t felt any effects yet.

Miller’s Clothing Store owner Randy Clark estimated between 50% and 60% of clothing sold in the United States is made in China, where day-to-day work activity has been disrupted by the virus.

Retailers typically order large shipments twice a year, Clark said, and most buyers, including himself, just placed an order in February.

“It is worrisome from our standpoint, if it goes on,” he said.

Another month of the coronavirus would affect that shipment, he said.

At Johnstown Pharmacy, staff members said drug companies rely heavily on ingredients sourced from China.

But for now the only product the pharmacy has run out of is medical masks – an item that barely sold before the coronavirus. Now the pharmacy gets calls for them daily, but they are backlogged.

Despite the concern, pharmacy owner Brien Warshel said he believes Johnstown’s relatively few travelers may help slow the virus’ spread to the local area. 

What might happen ... 

Considering the possibility of a local outbreak, Somerset County manufacturer Riggs Industries held a meeting Thursday to begin situational planning, said Shawn Kaufman, director of human resources.

“We are just starting to talk about it now, how this could affect us,” he said. “We are a manufacturing company, so what would happen here with a quarantine, if people were forced to stay home, is we’d be shut down for a period of time, but the back office people in accounting and HR would need to keep things going for people. So there needs to be those discussions, even though hopefully it doesn’t get to that point.”

In the construction industry, contractors are keeping an eye on supply chains for their materials, said Jon O’Brien, executive director of the Keystone Contractors Association, a statewide commercial construction trade association.

“For the most part it hasn’t affected us, but it is still hanging out there,” he said. 

China produces 30% of steel for the construction industry, he said. 

It’s possible also that public school districts’ food services or other supply vendors could be hindered by economic inactivity in the growing number of countries where the coronavirus has been identified, said Ferndale Superintendent Carole Kakabar.

“We have no problems with vendors,” Kakabar said. “Not yet.” 

Eye on growth models 

None of the Cambria Regional Chamber’s 600 members are reporting supply-chain issues, Vice President Debra Orner said.

“But it is something that we are trying to keep on top of through conversations with members,” Orner said.

Orner said she is also monitoring the U.S Chamber of Commerce as it collects and shares information about supply-chain and travel challenges.

In a statement Friday, the U.S. Chamber of Commerce said a survey released by partners at the American Chamber of Commerce in China revealed widespread productivity declines in U.S. businesses with operations there.

Nearly one-third of the national Chamber’s 150 respondents in China said they are facing increased costs and significantly reduced revenue, the statement read.

“Some economic forecasters are predicting growth in China to fall from between 5% and 6% to between 2% and 3% in the first quarter, but that number could be lower ...,” the organization reported. “The U.S. will likely see growth curtailed by 0.1% to 0.3%. Under this scenario, growth could fall under 2% in the first quarter. Those effects will rise the longer the outbreak persists.”

Russ O'Reilly is a reporter for The Tribune-Democrat. Follow him on Twitter @RussellOReilly.

 

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