Optimism Up Even as Quotation Levels Fall
The 20-second survey reports that 90% of its participants saw quotation activity decline over the past month, suggesting sluggish orders looking forward. Even with quotation activity lagging, participants were more optimistic about business levels for June and July. Specific comments collected from AMT staff support expectations that business will improve, though modestly, as states begin to open up and both members and customers begin getting back to business.
AMT members are geographically clustered in the northeast, southeast, and Great Lakes states. These are states that are talking about lifting “stay at home orders” in June or July. For many members, they are looking to come out of the gates in a sprint. The preparation they have made in extending relationships, identifying new opportunities, and helping customers take advantage of downtime are expected to pay dividends when business resumes. Still, members are realistic and do not expect a V-shaped recovery in store for the near future.
Members’ responses point to an expectation that moving back toward early 2020-levels will take time. Supply chains are in disarray. Customers who laid people off will have to re-staff. Many shops will not move directly back to pre-crisis capacity levels. Unfortunately, the customer base will be smaller as most businesses reopen and some will not be able to. The Economist noted in a recent issue that as many as 10% of businesses in the United States will not be able to survive this downturn. The work they had will be redistributed, but that will take time.
But members’ cautious expectations are for a healthy rebound that will have the manufacturing sector back on track in 2021. Clearly, some skepticism, and some realism, has crept into the outlook for the remainder of 2020 and early 2021. Members have shared that employees will be asked to drive greater distances to reduce air travel. Air travel is going to require longer lead times and time spent at the airport. One company suggests that passengers will have to be at the airport 3.5 to four hours before their flights.
There are thousands of “projections” as to how the business world will change. Many of the projections conflict, but the sheer volume of projections suggests that this iteration of the “new normal” is unlikely to be as long-lived in our psyche as the Great Depression or the World Wars, but our care and concern will likely last longer than the pandemics of the past 50 years.