Second VDMA survey
Corona pandemic damages supply chains
The mechanical engineering sector is feeling the consequences of the coronavirus pandemic with increasing force. A second recent VDMA survey, which was answered by 965 member companies, clearly shows this.
The proportion of companies whose operations are impaired rose from 60% to 84% within two weeks. Almost every second affected company (45%) is suffering from "serious" or "noticeable" disruptions along the supply chain. Only five percent have so far been spared.
"As the virus spreads, the problems in the factories are logically also increasing. Parts and components that were ordered in Asia a few weeks ago have not arrived at the local plants. In addition, European suppliers, including German ones, are failing to deliver. This is leading to noticeable production burdens and also production losses," says VDMA Chief Economist Dr. Ralph Wiechers.
According to the latest survey, supply chain disruptions are particularly prevalent in Italy (75% of those affected), Germany (55%), China (51%), France (36%) and the USA (25%). "However, the situation in China and South Korea appears to be easing slightly. In addition, many mechanical engineering companies are reporting a significant increase in orders from their Chinese customers," explains Wiechers.
Cuts in investment plans
Machine manufacturers are now also more skeptical about the expected drop in sales. Almost 96% of companies anticipate a decline in turnover in 2020 that they will no longer be able to compensate for over the course of the year. A good 60 percent of them put these declines at between 10 and 30 percent. To compensate for this, three quarters of the mechanical engineering companies surveyed have already made capacity adjustments, mainly via the working time account, but also in the form of hiring freezes and short-time working.
"Twelve percent of companies are already considering reducing their workforce - including parts of their core workforce," explains Wiechers. Almost three quarters of companies are considering cutting back on their investment plans for 2020 due to uncertain business prospects and liquidity bottlenecks, half of them by ten to 30 percent and around a quarter by more than 50 percent. "One of the most pressing tasks for the time after corona will be to help out here, i.e. to get investments back on track," emphasizes the VDMA chief economist. as
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