Executive Summary of the WFSGI Covid-19 Impact Survey May Edition
Manufacturing Companies Responses:
Significant order decrease remains a challenge for the sector. While the situation has slightly improved for Europe and Northern America, the survey has shown a slight decrease of the demand in South Asia, the Far East and the African & Middle East region.
With regard to logistics some important improvements can be seen: factories seem to have re-opened at large scale as only half of last months respondents were confronted with closed factories of suppliers. Also, shipping companies seem to have increased their capacities again as only 12% of respondents face shipping issues which is a significant drop compared to last month.
Still a high 70% of respondents face supply chain disruption which remains one of the most serious consequences of this pandemic. The situation remains unchanged for the whole of the Americas and the African & Middle East region. However, there seem promising developments taking place in South Asia and Europe where the situation has substantially improved.
Half of the respondents are challenged by labor shortage. There are overall no important changes compared to last month except for: forced company closure has been faced as an issue by half as many people compared to last month. The same goes for shut down of public transportation making it difficult for staff to access the factories.
The numbers remain comparable with regard to regulatory measures taken by local governments specifically for the pandemic. There is a small decrease of less than 10% of respondents who are affected by regulatory requirements.
The same can be said for problems arising from low cash flow. It remains a crucial challenge for nearly 80% percentage of respondents and the situation has only minorly improved over the past month.
Still 90% see their business being impacted by this pandemic. There is close to no change compared to the situation in April, the majority of respondents still expect a drop of their business of 50%. The most affected regions remain Europe where 80% see a decline of their business and Northern America with 70%.
Industry confidence regarding the future outlook and recovery has changed compared to last month: Double as many people have pessimistic outlook as they don’t expect any recovery at all. In return the percentage of respondents expecting a full recovery has increased from zero to 7.5%. Timewise, double the number of respondents in May think that they will need more than one year to recover compared to April.
The selected measures to positively address the impact of the pandemic remain roughly unchanged compared to last month. The only noteworthy changes concern the fact that around 15% less people than last month will adopt lean production and consolidate production.