Pandemic casts a shadow on industry
The coronavirus pandemic has triggered a collapse in the mood among industrial enterprises. Following optimism at the start of the year, seven out of ten companies now assess the business environment as bad. There is an expectation of falling profits within the service sector too.
For the current edition of its quarterly economic survey, the Office for Statistics (AS) undertook a comprehensive update to its questionnaire, as outlined by the government of Liechtenstein in a press release. It was not only the methodology that was adjusted, but the service sector was also included in the survey for the first time, the press release explains further.
The findings from the most recent survey reveal that the coronavirus pandemic is “clearly casting a shadow on industrial companies”, the press release states. Seven out of every ten industrials describe the business environment at the end of the first quarter of the year as bad. The reasons for this include a decline in incoming orders, falling rates of production and profitability as well as redundancies in the first quarter.
In addition, industrial companies anticipated a further deterioration in the situation over the current quarter. In specific terms, the firms discussed the possibility of declining utilization rates of production capacities and profitability. In contrast, there are no further plans to cut staff numbers.
Conversely, service sector companies, which were included in the survey for the first time, offered a predominantly positive assessment of the currently prevailing business environment, the press release reveals. In comparison with the previous quarter, the situation has, however, deteriorated for the majority of companies. For the current quarter, a total of 67% of respondents from the service sector also expect the situation to worsen, particularly with regard to profits.