Manufacturers weather pandemic while other industries hurt

INDIANAPOLIS (AP) - Indiana's manufacturers have generally weathered the coronavirus pandemic better than other industries, even as some plants have been battered by changes in consumer spending amid the public health crisis, according to some business leaders.

Because companies that make up Indiana's key manufacturing industry are designated as essential businesses, most have remained in operation and haven't seen nearly as many closures and layoffs as restaurants and hotels.

Some Indiana manufacturing plants scaled back production and furloughed workers, but they remained open even as stay-at-home orders forced other industries to pause their operations, the Indianapolis Business Journal reported.

'œGenerally, the manufacturing sector is doing well - not all the way back yet, but doing well as compared with other sectors,'ť said Brian Burton, president and CEO of the Indiana Manufacturers Association.

In 2019, manufacturing was responsible for 26.9% of Indiana's gross domestic product and employed more than 16% of the state's workforce. Those wide-ranging manufacturers have felt varying degrees of impact from the pandemic, based largely on what markets they serve.

Indianapolis-based Major Tool & Machine has continued hiring and expanding its workforce during the pandemic. The company, which has about 400 employees, offers welding and fabrication, precision machining, engineering and other services for customers in the aerospace, defense, energy and other industries.

'œWe're talking about government budgets. There's still money being spent there," company President Mike Griffith said.

The automotive and commercial aircraft markets, however, have been hurt by the pandemic.

Honda Manufacturing of Indiana suspended production for seven weeks at its Greensburg plant beginning in March, although operations are now back to normal. Honda spokeswoman Yolanda White said the plant actually added extra production days over the summer to meet pent-up demand - as did all of Honda's plants in the U.S. and Canada.

In contrast, Indianapolis-based EnerDel Inc., which makes lithium ion batteries for the transit and off-highway markets, has seen a sharp downturn as mass transit systems nationwide experienced sharp ridership declines and service cutbacks amid the pandemic.

'œWe actually had a pretty good first quarter for our business, but then the second quarter just really, really took a dive,'ť said Michael Canada, EnerDel chief executive. That slowed production in the second quarter. The company laid off about 20% of its workforce at the end of July.

Indiana's recreational vehicle industry, which is centered in Elkhart, has seen demand rise, in part, because consumers see RVs as a way to travel with minimal exposure to COVID-19.

The RV Industry Association said last month that it expects to ship 424,400 vehicles this year, which would represent a 4.5% increase over 2019. That trend is expected to continue into 2021.

Ball State University economist Michael Hicks said one reason the pandemic hasn't been as severe for manufacturing as for other industries is that the public health crisis has shifted consumer spending.

'œHousehold consumption patterns shifted at least temporarily away from services,'ť Hicks said. 'œPeople spent more money on things.'ť

And since manufacturers are the ones making those 'œthings,'ť he said the industry saw a boost.