The COVID-19 pandemic continues to take a toll on an industry that represents 12 percent of the U.S. manufacturing sector, according to a new survey released today by the Association of Equipment Manufacturers (AEM). While equipment manufacturers are adjusting to the changing economic conditions, three quarters of U.S. equipment manufacturers say that the impact of the COVID-19 pandemic on the overall economy is still very negative. In addition, six out of 10 executives say that the federal government has not done enough to support the industry. Because it continues to face decreased demand and disrupted supply chains.
“The COVID-19 pandemic continues to negatively impact equipment manufacturers. It is also negatively affecting the 2.8 million men and women of our industry,” said Dennis Slater, president of AEM. “We have seen some improvements to the operations and financial outlook for our member companies. However, the industry still faces a long road back to normal. Even as our industry continues to help build, feed, and power our country, far too many of our member companies are running out of time.”
As the country navigates the ongoing COVID-19 pandemic, equipment manufacturers, suppliers, and distributors have largely remained open. They have also continued to supply the equipment necessary to keep the country moving forward. They aim to help lead the recovery and renewal of the American economy. However, many equipment manufacturers are still struggling to keep workers on the job. Eight out of ten executives indicating that they will not be able to re-hire workers laid off earlier in the year.
Survey results of the COVID-19 pandemic effect on industry :
The second survey of presidents, CEOs, and owners of leading equipment manufacturers comes as more states are opening back up for business. It also comes as congressional leaders negotiate a fifth stimulus package. Slater continued, “It is very encouraging that equipment manufacturers are adjusting to the new normal. And they are-opening all of their facilities. However, the impact of this unprecedented crisis is far from over and will be felt for a very long time. Equipment manufacturers have not received the support they need from the federal government. Therefore, imperative that they take immediate and aggressive steps to support our industry.”
The survey was in the field from May 28 to June 15, 2020. The 102 respondents weighed in on the effects of the COVID-19 pandemic on the economy, the industry and their companies. They also weighed in on the effects to the supply chain and manufacturing operations, their financial expectations. In addition, they looked at the challenges they continue to face and specific ways the federal government can keep equipment manufacturing strong and ensure the nation’s economic resilience.
The survey’s key findings include:
- Three quarters of respondents said that the impact of the COVID-19 pandemic effect on industry and on the overall economy is still very negative. While just under half said that the impact on the industry is equally bad.
- One-third of respondents said they plan to lower their financial outlook by up to 30 percent over the next 30 days. Another one in eight respondents indicated they expect to reduce their outlook for the rest of the year by up to 30 percent.
- Executives said that employee health and well-being, lack of new orders, and continued supply chain challenges are the three biggest issues they face as they re-open their facilities.
- The COVID-19 pandemic is taking its toll on the industry’s workforce. More than one-third of respondents said they have furloughed up to half of their employees. While roughly one in five of respondents indicated that they have laid off as many as 10 percent of their workforce.
- The road to recovery has warning signs throughout. For equipment manufacturers who have furloughed workers, nearly a third said they would not bring anyone back to work. For those who laid off workers, eight out of ten said they will not rehire them. This is based on current market conditions and challenges.
- More than eight out of 10 respondents said they would like to see a significant investment in infrastructure. This would be to help keep equipment manufacturers in business during the crisis. It would also set the stage for the economic recovery.
- Looking ahead, a clear majority of respondents said that the equipment manufacturing sector is not getting the support it needs from the federal government. This support should come as it continues to navigate the various challenges caused by the COVID-19 pandemic.
The detailed findings are available in a memo by AEM’s Market Intelligence Team
AEM continues to lead the industry’s response to the COVID-19 pandemic effect on industry. They are also working closely with state and federal officials to help contain the spread of COVID-19. Their goal is to keep equipment manufacturing in America strong, and ensure the nation’s economic resilience. AEM has also called for bold action from Congress and federal agencies. This includes continued federal designation deeming equipment manufacturers and their employees, suppliers, and distributors as “essential.” It also means additional support to ensure small and medium-sized equipment manufacturers have access to the cash they need to keep operations going.
About AEM
AEM is the North American-based international trade group representing off-road equipment manufacturers and suppliers. They have more than 1,000 companies and more than 200 product lines in the agriculture and construction-related industry sectors worldwide. The equipment manufacturing industry in the United States supports 2.8 million jobs. It also contributes roughly $288 billion to the economy every year.
