Post the lockdown phase, VDMA conducted a third survey to assess the impact of Covid-19 on the engineering industry and the business activities of VDMA members in India.
Here’s the result :
VDMA India Flash Survey 3.0 on Coronavirus 2020 was conducted with the aim to gauge the impact of the prevailing situation on the business activities of VDMA members in India. Held between July 07 – 11, 2020, the survey comprised 11 basic questions and gathered 202 responses across 35 sectors of the mechanical engineering industry. The participants of the survey needed on average 02 minutes 18 seconds to answer the questions with their characteristics. The survey results were then analyzed to capture a holistic overview of the economy and the business situation that lies ahead of us.VDMA India’s prior two flash surveys on Covid-19 were conducted with lockdown in full affect between March 30 – April 03, 2020 and April 21 – 25, 2020.
Key highlightsAs per the latest survey (VDMA Flash Survey 3.0), it can be observed that for the next four-six months, order intakes, new business orders and a push in business and economy is looking difficult
• Sixty percent of the respondents felt that it would take more than a period of six months to attain normalcy. During Flash 2.0, 50 percent of the participants estimated a period of three to six months to return back to normal conditions, whereas during the first survey, 44 percent of the respondents expected three to six months to normalcy.
• Eighty five percent of the respondents felt that the Pharmaceutical and Medical industry would grow in the near future. Industries like Mining, R&A, Defence, Railways, Textile & Garment, Machine tools, Online Education Technology, Packaging are also expected to grow as we move forward.
• Even post lockdown, 86 percent of the respondents felt that they will not be able to achieve their targets in 2020. While only 14 percent were hopeful of achieving their target.
• 44 percent of the organizations felt that they would witness a loss of more than 20 percent revenue for the financial year 2020-2021. While 15 percent felt that it is still too early to be able to predict precisely.
• 50 percent of the companies estimate 50-70 percent of capacity utilization in the financial year 2020-2021.
• During Flash Survey 2.0, 41 percent of the companies estimated 70-80 percent of capacity utilization in the financial year 2020-21. This number has significantly come down to almost 28 percent during the latest VDMA India survey.
• Hence, it is evident that the business sentiment has been impacted further adversely even after the lockdown restrictions being removed.
• 84 percent of the survey participants reported that their customers have postponed investments under the prevailing COVID-19 scenario.
• Almost 62 percent feel that it would still be more than six months for everything to get back to normal.
• 40 percent during the second flash survey and 33 percent during the flash survey 1.0 estimated a period of more than six months to return back to normal conditions during the second flash survey. Response from the mechanical engineering industry is pessimistic than before.
• 85 percent of the respondents feel that the Pharmaceutical and Medical industry would grow in the near future.
• Industries like Mining, R&A, Defense, Railways, Textile & Garment industry, Machine tools, Online Education Technology, Packaging are also expected to grow as we move forward.
Source : VDMA India