Around 98% of companies - and therefore almost all mechanical engineering companies - are now suffering from the economic consequences of the coronavirus pandemic, according to the results of the 5th VDMA flash survey of its member companies. A total of 730 companies took part. "The demand side remains very tense," says VDMA Chief Economist Dr. Ralph Wiechers. "At the beginning of May, a good third of the affected companies were already experiencing serious order losses or cancellations, and by the end of May this figure had risen to over 40 percent," he explains.

However, the problems with broken supply chains are gradually being put into perspective. Over 80% of affected companies now report no or only minor supply-side disruptions. At the beginning of May, this figure was still 61%. "There were already signs of an easing of the supply situation along the value chains at the beginning of May. This positive development has continued, as the results of the latest flash survey show," explains Wiechers. Over 40% of companies also expect supply-side problems to continue to decrease over the next three months.

The liquidity situation in companies has changed only marginally compared to the end of March. Around 70 percent of the affected companies have no or only minor liquidity bottlenecks and only four percent have serious liquidity bottlenecks. "The majority of companies have been able to build up reserves in recent years. This is now paying off," says Wiechers.

However, the VDMA chief economist looks at the employment situation in companies with a worried expression. Capacity adjustments can often no longer be avoided. "For more and more companies, reducing the number of permanent staff is becoming unavoidable. The proportion of companies that already had to record a decline in turnover in 2019 and are now using this instrument is particularly high," says Wiechers.

In contrast, turnover expectations in the mechanical engineering sector have hardly changed in the past ten weeks. Around six out of ten companies continue to expect a decline in turnover of ten to 30 percent for 2020. "It is not surprising that companies that recorded a drop in turnover in 2019 are also somewhat more skeptical for 2020," summarizes Wiechers. as