Document: 2020-04_CEMA_Business_Barometer_Report.pdf

The general business climate index for the agricultural machinery industry in Europe has dropped as sharply and deeply as it has not since the financial crisis of 2008/09. The recent developments in the wake of COVID-19 have obviously also shocked the agricultural machinery industry.

While the evaluations of current business have deteriorated to their worst level since 2016, the future expectations have dropped even more sharply to a historically negative level. It is also remarkable that the survey participants have lowered their expectations practically without differentiation across all segments and markets. This inevitably raises the question of whether the massive deterioration in future expectations is a temporary overreaction. Furthermore, the actual incoming orders collapsed in the last month of March, but not by far to the same extent as the future expectations.

On the other hand, the developments in the course of COVID-19 have only started to have a major impact since mid-March. Moreover, the restrictions in the course of COVID-19 are undoubtedly massive: On average of all companies participating in the survey, the production capacity utilization is only at 60% of the level before COVID-19. 79% of the companies report shortages on the supplier side. And on the distribution side, the partners are able to run business at only 58% of the level before COVID-19. Accordingly, compared to the previous month, the participants have also significantly downgraded their turnover forecast for the total year 2020 (Median: from 0% to -15%, Arithmetic mean from +1% to -13%). 

2020 04 Barometer