NEWS | MARKET UPDATE
the world, the biggest by some margin was the sudden drop in demand, which was identified by 66% of respondents. Other key challenges included staff working from home (cited by 49%), implementing Covid-19 workplace safety measures (44%), logistical difficulties (31%) and material shortages (28%). For a minority of firms — 20% — the need to meet sudden demand spikes was a significant challenge.
Production impact Given that the majority of these and other less commonly identified business challenges were negative, it is no surprise to see that production capacity was impacted. Almost half of respondents (48%) said production was reduced against just 8% that recorded increases. Capital investment plans have also been negatively impacted with more than 40% flagging an immediate or significant reduction. Spending on new product development and sales and marketing remain neutral across the surveyed companies (meaning any intended reductions are balanced by planned increases). In terms of the response
to the Covid-19 challenges, the most intense focus is identifying and targeting new market opportunities. This was cited as a priority by 49% of respondents. Other common actions mentioned by respondents included renegotiating supplier contracts (23%), reducing sales prices (22%), identifying alternative materials and components
18
When did Covid-19 start impacting your business activity?
How has your company’s business activity during the first half of 2020 changed compared to the same period last year?
(20%), and collaborating more closely with local companies (19%). Other responses include reducing staff training
COMPOUNDING WORLD | August 2020
(16%), streamlining product lines (15%), extending maintenance schedules (14%), and delaying supplier payments (13%). Despite
the disruption the pandemic caused to global supply chains, only 3% of respondents said reshoring of production was a priority.
www.compoundingworld.com
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