The Coronavirus May Be Worse Than a Natural Disaster

Everyone is wondering when China will return to work. While it may be tempting to consider past epidemics or labor strikes to gauge how quickly that could happen, the industrial shutdown from the coronavirus is looking more like a natural disaster than anything else. It may even get worse.

Chinese industrial activity remains severely depressed. One tracker shows an even sharper, albeit shorter, drop than the global financial crisis in 2008. Coal consumption at six major power plants is well below normal operating levels this time of year. Already, global suppliers’ delivery times are getting longer, particularly in Germany and Japan, according to Goldman Sachs Group Inc. Companies that have come back online are struggling to return to full capacity. While some government controls have loosened in recent days, strict quarantines in key manufacturing hubs continue to take a toll.