Global manufacturing companies will experience a significant profit drop this year due to the impact of COVID-19. International credit rating agency Moody's Corporation published a report on the future of the manufacturing industry on Tuesday (local time), which estimates that the industry’s earnings before interest, taxes, depreciation, and amortization (EBITDA) will decline 13 percent this year. The credit rating agency predicted at the end of last year that the industry’s EBITDA will show a zero to one percent rise.
“The new figure reflects highly uncertain business environments. Global manufacturing sales and profits will drastically reduce from the second quarter this year,” said a member of Moody's Corporation, adding that COVID-19 will affect almost all areas of the global economy. “There will be almost no manufacturing company whose business won’t experience challenges this year,” Moody’s said.
Global manufacturing volume will drop 11 percent due to the impact of COVID-19 from the fourth quarter of last year to the second quarter this year and that such rapid decrease would be faster than the 2008 global financial crisis, Oxford Economics wrote in a recently published report. The affiliate of the University of Oxford added that global manufacturing volume will not recover to the pre-COVID-19 level until the second quarter of next year.