640 VDMA member companies took part in the survey. "60% of our members expect to achieve nominal sales increases in 2021. Those companies that expect only a slight drop or even an increase in sales in 2020 are also more optimistic for 2021," analyzes VDMA Chief Economist Dr. Ralph Wiechers.

However, there is still a long and rocky road ahead before the sales level of 2019 is reached again. "There are initial signs of an improvement in numerous leading indicators. But this optimism is expectation-driven and therefore very fragile," warns Wiechers. It should also be taken into account that more than half of companies are expecting sales to fall by ten to 30 percent in 2020. The basis for growth in the following year is therefore correspondingly low.

Continuing slump in orders
According to the survey, most decision-makers in companies continue to rate the current business situation as "poor". One of the main reasons for this is likely to be the ongoing slump in orders. "On the demand side, there is little reason to sound the all-clear: 45% of companies are reporting a noticeable drop in orders, with a further 34% even reporting a serious drop. This confirms the gloomy picture of recent weeks," says Wiechers. The mechanical engineering sectors with many customers from the automotive industry have been particularly hard hit.

However, the outlook on the demand side has recently brightened, albeit only slightly. A good quarter of companies expect demand to ease in the next three months. In mid-June, this figure was just over 20%. By contrast, the proportion of companies expecting the order situation to worsen has decreased and now stands at just 16% (mid-June: 21%).

Easing along the supply chains
The situation along the supply chains has also continued to ease. Only a good ten percent of companies are now affected by disruptions in their supply chains. Other disruptions have also eased slightly. "Nevertheless, we must not ignore the fact that travel and residence restrictions remain in place for many countries, as well as health and hygiene requirements, which continue to significantly hamper sales, assembly and, above all, service activities," says Wiechers.

Capacity adjustments are still in full swing: 68% of companies are using short-time working, 62% have imposed a hiring freeze and 17% have initiated a reduction in staff - including parts of the core workforce. as