Economic Update - Special Report

By Stefan Miksch

Category:
ARC Report Abstract

Introduction

To be able to provide our Advisory Service clients with holistic coverage of the impacts of the COVID-19 pandemic on various markets, ARC Advisory Group has decided to publish our latest Automation Index and Machinery Index as a consolidated Special Report in PowerPoint format.  This concise report focuses on the quantitative rather than qualitative aspects. ​

We have adopted our CapEx calculations to line up with the machinery and automation indices, but this did not result in significant changes to the overall dynamics.

COVID-19 Pandemic Status: Coronavirus: The Numbers

  • Origin:  China
  • Status quo (Sept 2020):
    • Global – little spread in Africa
    • Spread depends largely on governmental measures
    • No proven vaccines or medications available
    • US, Brazil, and India have emerged as particular hotspots
    • Second wave in selected European countries due to travelling and less strict measurements – more younger people affected
  • Chart shows number of vaccination trials
  • No vaccine available so far, testing in progress
  • Vaccine expected to reach market in mid 2021
    • Source:  Zeit.de

 

  • Chart shows number of daily new infections, indexed to be 100 on the day with the highest number
  • Strategies towards virus:
    • Strict lockdown (Europe, Taiwan, India, Vietnam…)
    • Testing (S. Korea, Singapore)
    • Contact tracing (Japan)
    • Immunity (Netherlands, Sweden)
    • Variable to none (Brazil, UK, US, some emerging economies)

 

 

Automation Markets

Automation Index: Raw vs. Seasonally Adjusted Data

  • The direction of the index shows a downward trend for both raw and seasonally adjusted data
  • Both indices show a difference of over 2 percent in Q2 2020 growth rates. The decline is due to the negative impact of COVID-19 pandemic across the globe
  • Automation index saw a downturn since mid 2019.  COVID-19 came in early 2020, resulting in further negative growth rates in the first two quarters of 2020

Americas

  • In the Americas, the raw data shows that quarterly YoY development has been negative for a long time
  • The impacts of COVID-19, trade tensions and the recent global lockdowns, badly affected both the oil & gas, and aerospace & defense industries
  • Disruptions in supply chains further impacted electronics, semiconductors and mining segments

Europe

  • YoY growth continues to decline further in Q2 2020
  • European automotive and machinery companies saw strong declines. Food & beverage, pharmaceutical and chemical seem to be stable
  • Automotive industry has been experiencing downturn in growth rates since mid-2019 due to transition to electric vehicles and the recent COVID-19 pandemic further impacted the industry hard

Asia

  • Markets further declined in Q2 2020 due to downturn of local automotive, semiconductor, and electronics markets due to COVID-19 pandemic and related supply chain disruptions
  • Without COVID-19, electronics & semiconductor would likely have bounced back in Q2 2020
  • China’s economy has seen a speedy recovery from COVID-19 pandemic compared with other nations globally and the market seems to be almost back to normal under increasing pressure to keep up with past production growth
  • Growth impulses also came from South East Asia

 

Machinery Markets

Machinery Index:  Preface 

economic update

 

  • ARC typically seasonably adjusts the data in our indices to more accurately show the business cycle, but we did not do so in our last Machinery Index (Q1 2020)
  • Since the seasonably adjusted data now shows a dip in the market, we have returned to our normal practice of seasonably adjusting the raw data for this Q2 2020 Machinery Index
  • Raw data shows a more significant downturn in Q2 2020 than does seasonably adjusted data

 

Table of Contents

  • COVID-19 Pandemic Update
  • Automation Index
  • Machinery Index
  • End User Index
  • Summary

 

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