The Coronavirus Pandemic and the Unknown
The Coronavirus has taken the world by storm in a short amount of time, quickly growing into a global pandemic. Millions of people and families around the world have been effected on many different levels. The impact is so strong that social distancing and business shutdowns have taken place in order to slow the spread of the virus for cities, states, organizations, and those alike.
At this point, the impacts of the virus and the containment measures are being felt on both the supply and the demand sides of the economy, leading to severe downturns in world economic output. In Q1 the GDP of the United States contracted by -4.8%, and in April the jobless rate rose to a record high of 14.7%. A similar picture is playing out around the world, with China’s economy contracting by -6.8% and Europe’s by -3.8%.
At the moment there seems to be a sharp contrast between our daily economic reality and investor optimism. Cases are still increasing in many parts of the country and world, yet the US stock market has rallied 30%, recovering over half of its losses since reaching multi-year lows in March. This investor confidence, however, hinges largely on how soon and how fully normal activity will return. This question — when will things return to “normal”? — is on everyone’s mind, and the answer will determine our trajectory out of the current situation.
The world is now embarking on a new phase in its response to the pandemic, with many national, state, and city governments easing restrictions to varying degrees. Depending on where you live, your children may now be returning to school, your places of worship may be reconvening, or your restaurant down the street may be ready to seat you. The large variation in policies is setting up a large-scale experiment that we will witness play out in the months ahead. When it comes to answering the question of when things will return to “normal”, it will almost surely be a regional story, and one will have to watch the epidemiologic and economic indicators to see how these varied policies translate to outcomes.
The Markforged Data Stream: Tapping into 10,000+ Manufacturing Sites Globally
There are many useful economic indicators out there that provide signal amidst the noise. We think we have a unique one that comes straight from the heart of the manufacturing floor.
Here at Markforged we make tools — an industrial 3D printing platform to be exact — that helps engineers and operators reinvent manufacturing. The strength of the parts that can be created with our metal and continuous carbon fiber additive manufacturing systems and easy-to-use Eiger software have made them a success in manufacturing operations across six continents. Our customers print a variety of parts for their operations, from soft jaws needed for complex machining steps, to lifting fixtures used in the assembly of engines, and robotic end-of-arm tooling for automated assembly lines. The ability to print parts like these reduces costs, shortens lead times, and reduces reliance on complex supply chains.
Our cloud-native software infrastructure powers a fleet of well over 10,000 industrial 3D printers across the globe. Beyond enabling our customers to access and monitor their devices remotely via our cloud-connected software, Eiger, this capability gives us deep insight into how our products are used. This visibility enables data-driven product decisions, which are core to Markforged and one of the factors that has driven our growth. It also gives us a unique view into the state of worldwide manufacturing with regional, real-time resolution.
A few observations on the national data:
- Italy was the first nation where activity declined, and where it declined the steepest. Printer activity in Italy peaked on February 23rd — the same day that Europe had its first outbreak in the Lombardy region of Italy and small towns began to be placed under quarantine. It broke out of the typical activity band on March 8th and plummeted to ~50% the following week as the government extended a nationwide lockdown.
- Japan’s activity remained unchanged, even increasing slightly until recently. This aligns with reports that for many weeks the nation seemed to have avoided the types of outbreaks observed elsewhere, even without efforts to restrict movement or widespread testing. The Japanese government changed course on April 7th, with Shinzo Abe declaring a state of emergency, however it largely has not had an effect on print activity. The sharp drop and recovery seen recently is likely attributable to company shutdowns for Golden Week, a cluster of Japanese holidays in the first week of May.
- All Western-nation activity is in a new phase of decline, with the United States, Canada, UK, and Germany registering activity levels about 30-40% off their most recent recovery highs. With many states and cities planning varying degrees of reopening, it will be interesting to see how much activity will recover and when.
While many nations have managed to flatten the exponential growth curve, there is enormous uncertainty about what that curve will look like going forward. Just as we have seen our data stream reflect the initial slowdown, then recovery, we’re confident it will continue to give an interesting signal about how nations are faring with their various reopening plans.
The SolidExperts are here for you during this tough time and are here to ensure that you have the proper manufacturing tools. Reach out here and an expert from the team will be happy to help.