The machinery industry is increasingly feeling the impact of order reduction and cancellation due to the coronary pneumonia pandemic. According to a quick VDMA survey, many companies are adjusting their production capacity.
Due to the consequences of the pandemic pneumonia epidemic, the situation in the mechanical engineering industry has deteriorated further. By the end of March, 84% of the member companies surveyed by VDMA had reported adverse effects, and this number has since risen to 89% (mid-April). In addition, the conversion of difficult problems continues: the interruption of the demand side, that is, the order is reduced or cancelled.
VDMA Chief Economist Dr. Ralph Wiechers said: "Overall, 45% of the companies reported significant order loss or cancellation, and 32% of the companies surveyed had even serious order difficulties. However, the supply chain is still Under tremendous pressure. "The center of destruction is still in Europe. More than 90% of mechanical engineering companies said that supply and demand sides from Europe were interrupted. On the demand side, the US also has a high default rate (47%). On the other hand, in China, the situation seems to be stabilizing.
Over the next three months, more than three-quarters of companies have not seen any relief from supply chain disruptions, and 28% of them even expect the situation to deteriorate. Most of the interviewees were even critical of the development of the order situation-43% thought that the situation on the demand side would deteriorate. Regarding projected sales, the company ’s assessment has not changed significantly: similar to March, approximately 60% of the company expects a full year 2020 turnover decline of 10% to 30%.
Overall, 45% of the companies reported a significant drop in orders, while 32% of the companies surveyed were even severely lost or cancelled.
Large companies are increasingly using calculations to reduce production capacity. 790 companies in the field of mechanical engineering participated in the third VDMA rapid investigation on the effects of the epidemic. In the past three weeks, the proportion of companies that have adjusted capacity has increased from 75% to 83%. "More and more companies are sending their employees for short-term work and arranging production shutdowns and layoffs-even some core employees. Large companies with annual sales of more than 1 billion euros are using these tools for capacity adjustment." The scientist explained.
If measures to curb the coronary pneumonia pandemic are alleviated in the foreseeable future, one-third of the companies expect that it will take 1-3 months and 3 to 6 months respectively to resume normal capacity utilization. More than 20% of the companies surveyed even expected this step to take 6 to 12 months.
