Covid-19 Outbreak Forced Companies to cut Revenue Forecasts
The Covid-19 pandemic is not over yet, even in China which took various measures to eradicate the virus. As a result, the pandemic continues to dominate the headlines for a long period of time. More than half of U.S. multinational companies in China’s most populous city reduced their annual revenue projections due to the recent Covid-19 outbreak in Shanghai, according to a survey by the American Chamber of Commerce in Shanghai published on Friday.
Many companies, more precisely 82% of manufacturers, reported slowed or reduced production due to various factors. They are struggling to find employees. Also, it is not an easy task to obtain supplies. Furthermore, companies have to cope with Covid restrictions.
54% out of 167 companies that participated in a survey, reduced 2022 revenue projections following the outbreak. Moreover, 38% said it was too early to estimate the impact.
Companies and China
Authorities in Shanghai are struggling to cope with the pandemic. The city has been battling its largest outbreak for nearly a month.
According to AmCham Shanghai, only half of the respondents were satisfied with the country’s pandemic efforts. Besides, 77% of the respondents expressed dissatisfaction with the length of quarantines.
The Covid-19 outbreak as well as subsequent curbs disrupted life. So, it is not surprising that companies are struggling to deal with challenges.
Not only U.S. multinational companies are struggling to stabilize the situation. A growing number of local companies also disclosed how the situation in Shanghai is weighing on them. Some of them even suspended operations.
Shanghai-based power transmission equipment maker Sieyuan Electric Co said the pandemic disrupted operations, logistics as well as material supplies.
East Money Information said it was highly uncertain if its annual shareholder meeting can be held at its headquarters in Shanghai on April 8.
Another local company, Shanghai Shizhong Intelligent Parking Corp said the lockdown forced it to stop parking services, directly hitting performance.