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Latest AEM survey illustrates the challenges manufacturers face

By |  June 25, 2020
Photo: iStock.com/Fertnig

Equipment manufacturers continue to face numerous challenges as the coronavirus pandemic continues. Photo: iStock.com/Fertnig

The coronavirus (COVID-19) pandemic continues to take a toll on equipment manufacturers, according to a new survey the Association of Equipment Manufacturers (AEM) released.

While manufacturers continue to adjust to the changing economic conditions, three-quarters of U.S. equipment manufacturers say the impact of the pandemic on the overall economy is still very negative. In addition, six out of 10 executives say the federal government has not done enough to support the industry as it continues to face decreased demand and disrupted supply chains.

AEM published findings from a similar survey this spring. In the earlier survey, nine out of 10 manufacturers indicated the impact of the coronavirus on the overall economy was very negative, and more than half (56 percent) said the impact on the industry was equally bad.

“The COVID-19 pandemic continues to negatively impact equipment manufacturers and the 2.8 million men and women of our industry,” says Dennis Slater, president of AEM. “We have seen some improvements to the operations and financial outlook for our member companies, but 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 U.S. navigates the pandemic, equipment manufacturers, suppliers and distributors have largely remained open and continued to supply the equipment necessary to keep the nation moving forward and help lead the recovery and renewal of the American economy, AEM says. Still, many equipment manufacturers are still struggling to keep workers on the job, with eight out of 10 executives indicating they will not be able to rehire workers laid off earlier in the year.

AEM’s second survey of presidents, CEOs and owners of equipment manufacturers comes as more states are opening back up for business and congressional leaders negotiate a fifth stimulus package.

Headshot; Dennis Slater

Slater

“While it is very encouraging that equipment manufacturers are adjusting to the new normal and reopening all of their facilities, the impact of this unprecedented crisis is far from over and will be felt for a very long time,” Slater says. “Equipment manufacturers have not received the support they need from the federal government, and it is therefore imperative that they take immediate and aggressive steps to support our industry.”

AEM’s latest survey was active between May 28 and June 15. The 102 respondents weighed in on the effects of the coronavirus pandemic on the economy, the industry, their companies, the supply chain and manufacturing operations, their financial expectations, as well as the challenges they continue to face and specific ways the federal government can keep equipment manufacturing strong and ensure the nation’s economic resilience.

Additional findings

Here are some of the survey’s key findings, according to AEM:

• Three-quarters of respondents say the impact of the pandemic on the overall economy is still very negative, while just under half say the impact on the industry is equally bad.

• One-third of respondents say they plan to lower their financial outlook by up to 30 percent over the next 30 days, while another one in eight respondents indicates they expect to reduce their outlook for the rest of the year by up to 30 percent.

• Executives say employee health and well-being, a lack of new orders and continued supply chain challenges are the three biggest issues they face as they reopen their facilities.

• The pandemic is taking a toll on the industry’s workforce. More than one-third of respondents say they have furloughed up to half of their employees, while roughly one in five indicate they have laid off as much as 10 percent of their workforce.

• The road to recovery is lined with warning signs, AEM adds. For equipment manufacturers who have furloughed workers, nearly one-third say they would not bring anyone back to work. For those who laid off workers, eight of 10 say they will not rehire them based on the current market conditions and challenges.

• More than eight out of 10 respondents say they would like to see a significant investment in infrastructure to help keep equipment manufacturers in business during the crisis and set the stage for the economic recovery.

• Looking ahead, a clear majority of respondents told AEM that the equipment manufacturing sector is not getting the support it needs from the federal government as it continues to navigate the various challenges caused by the pandemic.

Kevin Yanik

About the Author:

Kevin Yanik is the editor-in-chief of Pit & Quarry magazine. Yanik can be reached at 216-706-3724 or kyanik@northcoastmedia.net.

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