Wednesday, the Institute for Supply Management (ISM) released the first-round results of a survey focusing on the impacts to business and supply chains from the coronavirus. The ISM report indicated that nearly 75% of companies have now reported supply chain disruptions in some capacity as a result of the coronavirus causing transportation restrictions. If that is not enough damage, the ISM indicated that over 80% of businesses surveyed believe that their organization will see as impact related to the disruptions in the wake of COVID-19.

The new data also showed that 16% of companies surveyed have adjusted revenue targets downward, with an average drop of 5.6% tied to the coronavirus. There is a slight lag in the data as the ISM survey of 628 respondents was conducted from February 22 through March 5. Of the respondents, 52% represented U.S. manufacturing and 48% were from non-manufacturing and services organizations. Some 81% of the respondents are said to have revenues of less than $10 billion.

The impact is harder for companies with primary sourcing tied to China. The ISM survey showed that 57% of businesses noted longer lead times for tier-1 China-sourced components, and the average lead times have more than doubled since the end of 2019. So far, manufacturers in China have reported that they are on average operating at about 50% capacity and that their staff levels are roughly 56% of pre-coronavirus average levels.

One issue that also stands out is that businesses were simply not prepared with alternative supply chains. The ISM indicated that over 44% of respondents did not have a plan in place to address supply disruption from China, and of those, 23% are reporting current disruptions.

Of the companies expecting supply chain impacts, the severity anticipated increases after the first quarter of 2020, with about 62% of respondents experiencing delays in receiving orders from China and about 53% of respondents are having difficulty getting supply chain information from China. Another 48% of respondents are experiencing delays moving goods within China and 46% have reported delays loading goods at Chinese ports.

Companies also are cutting back or eliminating their trips to China. The ISM showed that over 60% of businesses that ordinarily travel to China now have no plans to go there over the next six months. Nearly half of businesses surveyed (47%) have also noted that international travel to other nations is now subject to extra scrutiny or limitations. The most mentioned “other” nations were South Korea, Italy, Japan, broadly Europe, Hong Kong and Singapore.

Thomas W. Derry, chief executive officer of ISM, said of this report:

The story the data tells is that companies are faced with a lengthy recovery to normal operations in the wake of the virus outbreak. For a majority of U.S. businesses, lead times have doubled, and that shortage is compounded by the shortage of air and ocean freight options to move product to the United States — even if they can get orders filled. … “We’re seeing that organizations who diversified their supplier base after experiencing tariff impacts, are potentially more equipped to address the effects of COVID-19 on their supply chains.

The ISM is not finished with this type of survey, and another update is expected with more recent data. It should be noted that the February 22 start date of the survey was while things were still getting worse on the operational side of the equation in China.

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