The current outbreak of SARS in China could have a major effect on the U.S. economy even if there are no major outbreaks of the disease in the U.S.  With over 90% of toys, action figures, and statues manufactured in the Far East, the SARS epidemic has the potential to create major problems for 2003 holiday season.  One manufacturer has already told ICv2 that production has slowed at the Chinese plants that manufacture his products.  With the full extent of the problem in China not known here in the West, it remains difficult to figure out whether this will be a major problem or just a minor hassle.

So far the major toy companies are downplaying the problem, while still hedging their bets.  Alfred J. Verrecchia, the newly named CEO of Hasbro, interviewed today on CNBC saw 'minimal impact' from the SARS outbreak: 'Well there's no question it's a concern,' he said.  'But at this point in time SARS has not had any dramatic impact on our ability to get product, nor do I think it has impacted any of the other toy companies in a major way.  Clearly, if they don't get it under control, that's going to be a concern going forward, but we see signs of it abating somewhat in Hong Kong, and hopefully the news out of China will be better as time goes on.'