"Mechanical engineering companies are becoming increasingly concerned about the demand side," says VDMA Chief Economist Dr. Ralph Wiechers. "In mid-April, a good three quarters of those surveyed had already recorded a noticeable or serious drop in orders or cancellations, and this figure climbed again to 85% at the beginning of May," he explains.

According to the survey, in which 724 companies took part, a look at the supply chains offers some hope: There are signs of a slight easing here. In mid-April, almost half of the companies stated that they were noticeably or seriously affected on the supply side. In the current survey, this figure is now just under four in ten companies. "Many mechanical engineering companies are reporting that the difficulties with supplies from China in particular are easing," says Wiechers.

It is also encouraging that the assessment of developments over the next three months has brightened somewhat on both the demand and supply side. In mid-April, the relative majority (43%) of companies still expected the order situation to worsen. At the beginning of May, only a good 30% of companies were still expecting an increase in demand-side disruptions. Just under half of companies now expect the situation to remain tense over the next three months.

In contrast, companies are facing major problems due to travel and residence restrictions. More than 80% of the companies surveyed stated that residence permits are not being issued or that their employees are not being granted access to their customers' premises. In addition, 62 percent of customers are delaying or refusing to accept delivered machines, while 43 percent of machine manufacturers cite liquidity bottlenecks. Almost a third of companies also see difficulties in transport and logistics processing or due to health and hygiene regulations.

Sales expectations in the mechanical engineering sector have hardly changed in the past six weeks. Almost two thirds of companies continue to expect a decline in turnover of 10 to 30 percent for 2020. The majority of companies with an annual turnover of more than EUR 1 billion are even more skeptical: three quarters of those surveyed expect a decline in turnover of this magnitude. "In view of the dynamic economic environment, these turnover expectations can only be a snapshot. The prospects for our industry are constantly changing at the moment. The 5% drop in production for the current year that we forecast at the beginning of March can therefore no longer be maintained," summarizes the VDMA Chief Economist.