The first six months of the COVID-19 pandemic have been a battle for everyone, but most of you think the next six months will be better for your businesses. That is according to a new survey of readers of manufacturing magazines published by Endeavor Business Media (EBM), the company that publishes Plastics Machinery Magazine.
The survey, which closed July 31, found 72 percent of respondents are optimistic that businesses will start to reopen and recover from the pandemic recession during the next six months.
But there is still plenty of pessimism. Asked when they thought their industry would recover, 21 percent said this year, 35 percent said the first half of 2021 and 19 percent said the second half. The remaining 25 percent said 2022 or later.
The survey went out to readers of EBM’s publications, which cover a variety of market sectors, including manufacturing, health care, transportation and law enforcement. In the manufacturing sector, 359 people responded; overall, 2,502 readers participated.
The data is fresh. It was collected during the last two weeks of July; I am writing this during the first week of August and you are likely reading it at the end of August in print or sooner online. Plenty of things that impact your business can happen in the near future, but, as I write this, there are frequent reports about specific sectors that need plastic components returning to more robust conditions.
While many businesses have been closed or forced to reduce activities, the manufacturing sector has been less affected. Some 69 percent said they are working normal hours, either at the office or at home.
Not surprising is that 65 percent said their business travel has decreased, but 24 percent said it is starting to pick back up. Virtual events have become a replacement for face-to-face events, with 92 percent saying they would attend a virtual event in lieu of travel.
Has your company reduced its 2020 budget? Some 51 percent said yes. More than 40 percent have suspended purchasing new equipment, 37 percent reduced their workforce, 21 percent reduced spending for parts and maintenance and 23 percent cut advertising and marketing expenses.
The COVID-19 experience will likely cause changes in how we do business beyond heightened sanitation procedures and social distancing. Some 25 percent said they expect to convert to a virtual customer service model; 27 percent said they expect to enforce a work-from-home plan for all or most employees; 20 percent said they expect to invest in automation or IoT technologies; 35 percent said they are re-evaluating supply chains.
Compared with the numbers for all survey respondents, the manufacturing sector (72 percent compared with 68 percent) is more optimistic about starting to recover in the second half of 2020. Slightly more in the manufacturing sector (69 percent compared with 67 percent) are working full time.
Disaster planning has been on everyone’s mind during the past six months, and 63 percent of those in the manufacturing sector said they had a plan in place before COVID-19 or have fully implemented one since it started.
So, what do all these numbers mean for you? One day, I talk to a processor who says his business is bad, and he is barely hanging on. The next day, another processor tells me he is buying machinery and trying to hire more people to keep up with demand.
The machinery and equipment manufacturers that have invested in U.S. manufacturing, assembly or additional warehousing have reaped rewards. Wittmann Battenfeld, Arburg, Sepro, Absolute Haitian and Nissei come to mind, but there are others. Having processing machinery and auxiliary equipment available for quick delivery in this country has proved to be a smart business move.
It will likely be 2022 before everyone’s business is back to where it was at the beginning of this year. I hope it is sooner, and NPE next May could give the industry a needed boost on the road to recovery.
But 16 percent of the manufacturing respondents said they believe that business-as-usual will never return for their companies, and 11 percent said their business model will continue as-is post-COVID-19.
A recommendation evidenced by the EBM survey: Re-evaluate, update or create your business continuity plan. COVID-19 has shown the value of having a good disaster plan.
Ron Shinn, editor