Almost 90% of German foundries are experiencing order losses or cancellations due to the coronavirus crisis. A third expect the crisis to last for more than a year: These are the key findings of the third survey conducted by the Federal Association of the German Foundry Industry (BDG).
In week 20, the BDG surveyed its members for the third time after March and April on the effects of the coronavirus crisis. Key statements from the previous surveys have become even more pronounced in the current survey: in the first survey in March, 76% of the companies surveyed had "felt the effects of the coronavirus on operations", while 24% had not. In the second survey in April, the denial rate had shrunk to 4% and 96% had noticed an impact on operations. In the current third survey, the figure has risen further. In May, 99% of companies noted an "impact on operations".
One serious issue is the lack of orders. Almost 90% of respondents answered the question about "loss of orders or cancellations" in the affirmative, with 54% even registering "serious" losses and only 12% "minor" losses. The question of "capacity adjustments" was answered in the affirmative by 81% of the companies surveyed. The instruments listed were "short-time working" (77%) and "production stops" (46%). As many as 29% of the companies surveyed also mentioned "downsizing" as a measure currently under consideration. "It is crucial for companies in the foundry industry to have planning security for their customers," says BDG Managing Director Max Schumacher. "There must be partnership-based and transparent agreements, and purchasing behavior must not be at the expense of the foundries supplying them. "When asked about current or expected future use of loans in the event of liquidity bottlenecks, the industry picture is heterogeneous. Around 52% of the companies surveyed are well able to cushion the impact of the coronavirus crisis and do not see any current or future need for liquidity through loans. A small minority of 44% already have liquidity bottlenecks or expect them.
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