Coronavirus Survey Serious Shortage of Orders During Corona Crisis
Nearly 90 % of German foundries are experiencing order losses or cancellations due to the Corona crisis. One third expect the crisis to last for more than a year. The survey was conducted from May 8th - May 14th, 93 German foundries took part.
In week 20, the BDG surveyed its members for the third time after March and April on the effects of the corona crisis (find previous results here). Essential statements of the preliminary surveys have become even more pointed in the current survey: In the first survey in March, 76 % of the companies questioned had felt effects of the coronavirus on the operating process, 24 % had not. In the second survey in April, the negative rate had shrunk to 4 %, 96 % had noticed effects on the operational process. In the current third survey, the value has increased further. In May, 99 % of the companies stated effects on the operating procedure.
In order to provide German foundries with a guide during the corona crisis, we have invited a panel of experts. Click here for the German language webcast:
One serious point is lack of orders. When asked about loss of orders or cancellations, almost 90 % of those surveyed said yes, 54 % even registered serious losses, and only 12 % minor losses. The question about capacity adjustments was answered in the affirmative by 81 % of the companies surveyed. Short-time work (77 %) and production stops (46 %) are listed as instruments. No less than 29 % of the companies surveyed also cite staff cuts as a measure currently under review. "A decisive factor for companies in the foundry sector is the planning reliability of the customers who are taking off," says BDG's managing director Max Schumacher. "There must be partnership-based and transparent specifications, the acceptance behaviour must not be at the expense of the supplying foundries".
The industry picture is heterogeneous when it comes to the question of current or expected future use of loans in the event of liquidity bottlenecks. Around 52 % of the companies surveyed are well able to cushion the corona crisis and see neither current nor future need for liquidity through loans. A small minority of 44% already have liquidity bottlenecks or are expecting them: "These include companies that are facing a crisis that threatens their existence," says Schumacher. "The measures adopted by the Federal Government must be implemented in such a way that they reach the companies quickly and without red tape."
New in the current member survey was the question of the expected time horizon for returning to normal capacity utilization. Only a minority of 5% and 8% of those surveyed expected a time horizon of 1 to 3 and 3 to 6 months respectively. The majority of 82 % of the companies expect the crisis to last at least half a year, 32 % of them expect it to last more than a year. The industry expects a decline in turnover for the current year 2020; relatively most companies expect a drop in turnover in the range of 20 to 30 %. Therefore, in addition to avoiding additional burdens, effective economic incentives must now be put in place to enable German SMEs to make a fresh start.