In mid-March, when the severity of the COVID-19 pandemic hit home in the U.S., the economic impact was both sudden and sweeping.
Restaurants and retail stores were mandated to shut their doors, prompting a cascade of job cuts in those industries. Meanwhile, efforts to shift priorities and prepare for the virus compelled health care establishments to cancel elective surgeries and lay off a substantial portion of their staffs.
By comparison, the manufacturing industry had not yet seen the worst of its downturn.
Mark Schwab, the owner of Lancaster (Wis.) Machine & Tool, recalled that his company had a backlog of orders that kept it busy through March and much of April. But the sense of normalcy eventually ended.
“It hit us about a month after it hit everybody else,” Schwab said. “Eventually, it catches up to you. Our customers saw a decrease in their orders, so they pulled back, and it affected our orders as well.”
In recent months, multiple companies have announced major layoffs or outright closures.
At John Deere Dubuque Works, indefinite layoffs that took effect in May and June collectively impacted more than 260 production workers. Meanwhile, the permanent closure of the Flexsteel Industries manufacturing facility in Dubuque resulted in the loss of 213 jobs. And about 125 jobs were lost due to closure of Hollander Sleep Products in Maquoketa.
Numbers obtained by Greater Dubuque Development Corp. show that 2,514 Dubuque County manufacturing employees have filed initial unemployment claims since March 15.
Of the claims, 1,015 were filed in the six weeks stretching from March 15 to April 25. The remaining 1,499 were filed in the 12 weeks that followed.
Other hard-hit industries have observed opposite trends.
In the “accommodation and food services” sector, there were 1,440 new unemployment claims during that initial, six-week stretch ending April 25. In addition, there were 1,172 initial claims in the retail trade sector and 1,780 in health care and social assistance during that time.
Over those first six weeks, the accommodation and food services sector led the county in new unemployment claims twice, while the health care and social assistance sector occupied the top spot four times.
The manufacturing industry has led the county in new unemployment claims in 11 of the 12 most-recent weeks.
Rick Dickinson, president and CEO of Greater Dubuque Development Corp., believes the differing results reflect the ways in which the industries were affected by recent events.
Hospitals, retail stores and restaurants, on one hand, were affected by mandated government shutdowns, experiencing a massive initial hit, but they have since started rebounding.
In the manufacturing sector, which did not face the same kinds of mandated shutdowns, the wave of job cuts was caused by the pandemic itself.
“It has impacted orders, and it has impacted the supply chain,” Dickinson said. “Even if a manufacturer did have the orders coming in, they may not be able to get the parts they need or they may not have the workforce they need.”
At Lancaster Machine & Tool, employees create machines and tools that help other manufacturers build their products. As a result, its business often reflects the broader ups and downs of the manufacturing industry as a whole.
Schwab said many manufacturers have been forced to scale back or shut down due to health-related concerns. Demand for end-products also has swayed manufacturing activity. For instance, the auto industry has slowed considerably, while the food processing business has remained strong.
As orders have declined, Schwab has had to adjust staffing accordingly.
“We did not lay anybody off,” he said. “We cut back our hours and tried to get by that way.”
Nicolas Hockenberry, director of Jackson County (Iowa) Economic Alliance, has noticed a similar trend among manufacturers in his neck of the woods.
“Prior to this, the big problem for employers was finding people,” he said. “That’s a big reason why these companies are hesitant to let go of a portion of their workforce. They are concerned about replacing them when the economy rebounds.”
In Jackson County, manufacturing firms have followed a trajectory similar to those in Dubuque County, experiencing only minor layoffs in the early stages of the spring and seeing those cutbacks escalate in the late spring and early summer.
Hockenberry noted that the fortunes of large manufacturers often trickle down to the smaller ones who rely on them.
“We have a couple of manufacturing firms who supply to larger ones like (John) Deere and Caterpillar,” Hockenberry said. “The decrease in demand has hit them particularly hard.”
Local economic development officials, however, say there are some positive signs emerging over time.
In both Dubuque and Jackson counties, the rate of layoffs and furloughs in the manufacturing industry has begun to subside.
Even so, Hockenberry acknowledged the fate of local manufacturers remains firmly intertwined with the uncertainty surrounding the virus.
“We are pleased to hear that many of them are finding ways to weather the storm,” he said. “The question is, how long of a storm can we expect?”