"Manufacturing plants in China are gradually resuming operations starting February 10, but the following two weeks will be a key observation period for assessing impacts of the coronavirus outbreak on the supply chains, according to industry sources.
Gartner estimated that initial labor force shortfalls may reach 20% or so following the resumption of manufacturing operations in China, which in turn will drive down production output. But many firms are seeking to resume normal capacity utilization rates by the end of February to minimize the impacts on their shipments, the sources said.
Besides workforce shortfalls, transport of components and raw materials will also affect capacity utilization and shipments of manufacturing plants in China, given that many countries have tightened controls over flights to and from China, the sources said.
But as retail sales in China - also a main market in the world - have been seriously hit by the outbreak, overall demand will weaken, which will ease off some pressure on the supply chain, and overall shipments shortfalls can be controlled at under 10%."