VDMA Survey: Mechanical engineering industry optimistic despite difficult order situation
6th VDMA Flash Survey on Corona Pandemic
The vast majority of mechanical engineering industries are confident of returning to the nominal sales level of 2019 in the medium term. This is the key message of the sixth VDMA flash survey on the corona pandemic, in which 658 member companies took part. "80 percent of our members expect to achieve nominal sales levels like 2019 again by 2022 at the latest. About 40 percent of the companies with annual sales of less than 250 million euros expect this step to be successful as early as 2021. The larger companies are somewhat more sceptical in this respect; only 22 percent of companies with annual sales of 500 million euros or more show this confidence," says VDMA Chief Economist Dr. Ralph Wiechers.
"But on the way there are a few other hurdles to overcome besides the corona pandemic," adds Wiechers. Around 70 percent of the decision-makers surveyed see growing price competition as a particularly major challenge for the future. More than half of the respondents rate higher foreign trade barriers and increasing market fragmentation as a persistent problem.
Order situation in mechanical engineering industry remains tense
Meanwhile, the order situation in the mechanical engineering industry remains very tense. "In each case, 40 percent of the companies report noticeable or serious order losses or cancellations," says Wiechers. Companies also remain pessimistic about the prospects on the demand side for the next three months. As in the previous survey at the end of May, only a good 20 percent of those surveyed expect demand to ease. Consequently, more than 80 percent of the companies are carrying out extensive capacity adjustments. About two thirds of the companies are using short-time work.
By contrast, the positive developments in supply chains and "other disruptions" are encouraging. "In almost all areas, those surveyed reported fewer disruptions, from logistics/transport processing and delayed acceptance by customers to travel and accommodation restrictions. Further easing of the situation can be expected in the wake of the opening of borders," concludes Wiechers.