News
CEMA Business Barometer: business climate remains deeply negative
Online since 14-05-2020
The business climate index for the agricultural machinery industry in Europe has improved slightly, but continues deeply negative at -59 points (on a scale of -100 to +100) after having dropped as sharply and deeply as it has not since the financial crisis of 2008/09.
According to CEMA, 60% of the industry representatives consider their current business to be unfavourable, 75% expect a declining turnover in the coming six months.
Although the restrictions in the course of COVID-19 are no longer quite as strong as a month ago, they are still there: On average of all companies participating in the survey, the production capacity utilisation is only at 74% of the level before COVID-19. According to the companies, their supplier side is supplying 80% and their partners on the distribution side are running business at only 66% of the level before COVID-19.
Only based on and thanks to the high order intake from the pre-COVID-19 era, the order volume is at a relatively good level. However, the order coverage will continue to melt. For the coming six months, more than 70% of the industry representatives expect further declines in incoming orders. And, according to the survey, also the actual order intake dropped further in the last month: Again, almost three quarters of the companies report falling orders, both from the EU market and from outside the EU, with more than half of them even reporting double-digit decreases.
Nevertheless, also a little light at the end of the tunnel can be seen: Regarding the turnover for the total year 2020, less survey participants (20% instead of 30% one month ago) forecast a decline of more than 20%, which leads to a less negative average industry forecast (Arithmetic mean -10% in May versus -13% in April). This correction might be the result of an expectation that the order intake will improve again in a few months so that some losses can be recovered towards the end of the year.
The entire CEMA Business Barometer report can be found here (pdf).
Although the restrictions in the course of COVID-19 are no longer quite as strong as a month ago, they are still there: On average of all companies participating in the survey, the production capacity utilisation is only at 74% of the level before COVID-19. According to the companies, their supplier side is supplying 80% and their partners on the distribution side are running business at only 66% of the level before COVID-19.
Only based on and thanks to the high order intake from the pre-COVID-19 era, the order volume is at a relatively good level. However, the order coverage will continue to melt. For the coming six months, more than 70% of the industry representatives expect further declines in incoming orders. And, according to the survey, also the actual order intake dropped further in the last month: Again, almost three quarters of the companies report falling orders, both from the EU market and from outside the EU, with more than half of them even reporting double-digit decreases.
Nevertheless, also a little light at the end of the tunnel can be seen: Regarding the turnover for the total year 2020, less survey participants (20% instead of 30% one month ago) forecast a decline of more than 20%, which leads to a less negative average industry forecast (Arithmetic mean -10% in May versus -13% in April). This correction might be the result of an expectation that the order intake will improve again in a few months so that some losses can be recovered towards the end of the year.
The entire CEMA Business Barometer report can be found here (pdf).