Daily Management Review

50% Of American Companies To Slash Revenue Forecasts Due To Shanghai Cvodi-19 Curbs


50% Of American Companies To Slash Revenue Forecasts Due To Shanghai Cvodi-19 Curbs
According to a poll released on Friday by the American Chamber of Commerce in Shanghai, more than half of US multinational corporations in China have decreased their year sales estimates, owing mostly to the recent COVID-19 epidemic in Shanghai.
82 per cent of manufacturers reported slower or reduced production owing to a lack of staff, inability to procure supplies, or government-ordered lockdowns, according to responses to the poll, which was conducted with 167 enterprises operating throughout China, including 76 in manufacturing.
More than half (54%) have lowered their revenue forecasts for 2022 as a result of the outbreak, though 38 per cent say it's too early to tell.
Some Shanghai manufacturers, particularly in the automobile industry, have resorted to using a "closed-loop" system, in which personnel are restricted inside the premises to keep production lines running while outside suppliers are shut out.
Such agreements are okay for a few days, but "not sustainable" in the long run, according to Eric Zheng, president of the American Chamber of Commerce in Shanghai.
"Even if your employees are within the factory bubble, your trucks have to come and go sending inputs and outputs, but that's not possible," said Zheng.
"I hope this is only a temporary, drastic measure to stop the spread."
Shanghai, which has a population of 26 million people, has been dealing with its worst outbreak in nearly a month, and most of the city was put on lockdown this week as cases continued to rise.
The lockdown was performed in two phases, with the eastern section of the city being targeted first, followed by the western part.
Only half of the respondents were satisfied with China's pandemic efforts, according to AmCham Shanghai, and 77 percent were dissatisfied with the length of quarantines.
A rising number of local businesses have spoken out about how the Shanghai lockdown is affecting them, ranging from halted operations and stalled sales to depleted liquidity and delayed financial statements.
The epidemic has affected operations, logistics, and raw material supply, affecting the company's first quarter and full-year performance, according to Shanghai-based power transmission equipment producer Sieyuan Electric Co.
East Money Information Co said it is unsure if its annual shareholder meeting on April 8 would be conducted at its Shanghai headquarters, and is recommending that shareholders participate online instead.
The shutdown has compelled Shanghai Shizhong Intelligent Parking Corp to cease parking services, directly affecting performance.