The proportion of companies that see their operations 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 5 percent have so far been spared, according to their own information. "As the virus spreads, the problems in companies 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.

Reduction in investment projects

Machine manufacturers are now also much more skeptical about the expected drop in sales. Almost 96% of companies anticipate a decline in sales 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.

"Downsizing - including parts of the core workforce - is already an issue for 12% of companies," 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 10 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.