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Coronavirus crisis weighs heavily on Germany's mechanical engineering industry

(Xinhua)    09:08, May 12, 2020

BERLIN, May 11 (Xinhua) -- The coronavirus crisis would "weigh heavily" on the mechanical engineering sector in Germany, according to a snap poll by the Mechanical Engineering Industry Association (VDMA) published on Monday.

Sales expectations in the German mechanical engineering sector had "hardly changed" in the past six weeks, according to VDMA. For 2020, almost two-thirds still expected a decline in sales of 10 to 30 percent.

"Given the dynamic economic environment, these sales expectations can only be a snapshot. The outlook for our industry is currently changing constantly," said VDMA chief economist Ralph Wiechers.

Nine out of 10 German mechanical engineering companies saw themselves affected by the economic consequences of the coronavirus pandemic, according to the survey of 724 companies.

Order losses and cancellations were becoming "increasingly noticeable," according to VDMA. "The demand side is causing increasing concern to the mechanical engineering companies," added Wiechers.

Already by mid-April, more than three-quarters of German mechanical engineering companies had recorded noticeable or serious declines in orders or cancellations. The figure now climbed to 85 percent, according to VDMA.

However, a look at supply chains would promise some hope as a "slight easing" of tension was apparent. "Many mechanical engineering companies report that the difficulties with supplies from China in particular are easing," noted Wiechers.

Travel and residence restrictions were still causing "major problems", according to VDMA. More than 80 percent of companies surveyed stated that residence permits for employees were not granted or that employees had not been allowed to access customers' premises.

In addition, 62 percent of German mechanical engineering companies found that their customers were delaying or refusing acceptance of delivered machines. At the same time, almost one third also reported difficulties in transport and logistics handling or health and hygiene requirements, according to VDMA.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: He Zhuoyan, Bianji)

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