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GER - Foundries cut investments

4th CORONA INDUSTRY SURVEY: Germany's foundry industry cuts investments and expects sales to drop drastically in 2020.

 

Whether the recession will affect employment may also depend on the extension of the short-time work allowance and the performance of the main customer sector, vehicle construction: These are central findings from the fourth monthly survey by the Federal Association of the German Foundry Industry (BDG).

Since March 2020 (first survey), the BDG has been polling its member companies every month in the corona crisis, thereby collecting exclusive and systematic data on the German foundry industry. The basic structure of the same questions is supplemented depending on the situation. The June survey focused on employment, sales development and the assessment of the economic stimulus package.

Regarding the topics queried from the beginning: “Effects of the corona virus on the operational process”, 76% of the companies surveyed had sensed such questions during the first survey in March. This had risen above 96% (April) to 99% (May) and fell to 92% in June. The lack of orders remains a serious point. As in May, almost 90% of the respondents answered the question of “order losses or cancellations” in the affirmative, 64% of the companies even registered “serious” losses (previous month: 54%). From the point of view of the German foundries, the issue of "capacity adjustments" has also tightened slightly. The question about this is answered in the affirmative by 85% of the companies surveyed (previous month: 81%). “Short-time work” are listed as instruments (81%, previous month 77%).


While “production stops” (33%, previous month 46%) decreased slightly, “staff cuts” could gradually become an issue for companies. Here the approval of the question rose from 29% to 34%. It is not surprising that this is gradually coming into focus given the further assessment for the current year 2020. Only a minority of 6% of the companies surveyed expect stable to slightly increasing sales for the current year, while 93% expect sales to decline, 92% of them more than 10% decline.

The findings on the question of investments are similar. According to the current status, only a minority of 25% want to stick to the investments planned for 2020. The vast majority of foundries want to cut, massive. 38% of the foundries surveyed forecast at least a halving of the planned investments. Germany's casters, however, do not predict a change in employment that corresponds exactly to the pessimistic expectations regarding sales and production development, although the signs point to a reduction. 23% expect employment to remain the same by the end of the year, with 69% of those surveyed predicting a reduction in the workforce, 64% of whom are expected to decline by more than 10%.

"Here, the regulation on short-time work apparently cushions even more pessimistic scenarios - whereby the question of duration will be decisive for further development. Because if just under 90% of our companies consider it necessary to extend the short-time worker regulation beyond the current year, this clearly shows from our point of view: Industrial SMEs in Germany need incentives for increasing incoming orders as quickly as possible, ”summarizes BDG general manager Max Schumacher fourth survey, "In particular, the automotive industry must again reliably and successfully bring volume models to buyers." Pleasing: Despite the severe recession associated with the corona crisis, Germany's foundries want to continue to train young people in the future: an overwhelming majority of 71% of companies want the number of their training positions keep constant. The survey took place from June 18 to June 24. (Calendar week 26), 89 German foundries took part.

Author: Martin Vogt
 

Company Info

BDG - Bundesverband der Deutschen Gießerei-Industrie e. V.

Hansaallee 203
40549 Düsseldorf

Telephone: +49(0)211/6871-0
Telefax: +49 (0)211/6871-333

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