Corona pandemic
Mechanical engineering increasingly affected
According to the VDMA, the situation in the mechanical engineering sector has worsened once again due to the consequences of the coronavirus pandemic. At the end of March, 84% of the member companies surveyed by the VDMA were already reporting adverse effects; this figure has since risen to 89% (mid-April).
In addition, the relative shift in problems has continued: towards demand-side disruptions, i.e. order losses or cancellations. "Overall, 45% of companies are reporting noticeable losses of orders or cancellations, with 32% of respondents even reporting serious ones. However, supply chains are also still under strong pressure," says VDMA Chief Economist Dr. Ralph Wiechers.
The epicenter of the disruption continues to be Europe. More than 90% of mechanical engineering companies cited supply-side and demand-side disruptions from Europe. On the demand side, there are also high levels of disruptions from the USA (47%). In China, on the other hand, the situation appears to be stabilizing.
No easing expected for the time being
More than three quarters of companies do not see any easing of the disrupted supply chains in the next three months, and 28% of companies even expect the situation to worsen. Most respondents are even more critical of the development of the order situation - on the demand side, 43% expect the situation to worsen. With regard to expected turnover, the companies' assessment has not changed significantly: similar to March, around 60% of companies expect turnover to fall by between 10% and 30% for 2020 as a whole.
A total of 790 companies from the mechanical engineering sector took part in the third VDMA flash survey on the consequences of coronavirus. The proportion of companies making capacity adjustments has risen from 75% to 83% in the last three weeks. "More and more companies are putting their employees on short-time working and initiating production stops and staff reductions - including for parts of the core workforce. Large companies with an annual turnover of more than 1 billion euros are using these instruments to adjust capacity more frequently than medium-sized companies," explains the VDMA chief economist.
If the measures to contain the coronavirus pandemic are eased in the foreseeable future, a third of companies expect to need 1 to 3 months and 3 to 6 months respectively to return to normal capacity utilization. More than 20% of the companies surveyed even expect this step to take 6 to 12 months.
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