There is cautiously more work in technology companies compared to two weeks ago. The average activity rate has gone up from 49.7% to 52.8% (+3.1%). According to Agoria, this is because a number of companies have found technical solutions to complying with the social distancing measures. One challenge, however, is the classic phenomenon that attention paid to complying with measures is also slackening among people working in companies. To prevent the virus from spreading further, Agoria calls for unremittingly great attention to be paid to this aspect of the crisis.
Despite the slight increase, the level of activity remains very low. The main obstacles to the activities of companies include the reduced demand (67%), the social distancing rules (39%), the availability of workers (38%) and the supply of raw materials and components (39%).
The highest level of activity is in the IT sector, where 77.3% (+2.3%) of normal activities can still be maintained. The materials sector, such as producers of non-ferrous metals, foundries and manufacturers of metal products, follows with 75.6% (+2.4%). There they manage to maintain the activity through teleworking. No fewer than 92% of those working do so from home.
The level of activity in the manufacturing industry and in the aerospace, security and defence sectors is doubling. These sectors were nonetheless almost completely flat two weeks ago. Between 20 and 27 March, the manufacturing industry was running at only 15.2% of the level of the same period the previous year, and then rose to 30.5% already between 7 and 10 April. The manufacturing industry comprises companies that provide machines, components and solutions for the production equipment of the processing and manufacturing sectors. The aerospace, security and defence sectors jumped from 7% to 20%.
Introducing social distancing rules is far from self-evident for many companies. Solutions have not yet been found for all the challenges posed by compliance with social distancing. We also fear that social distancing will be technically unfeasible for a number of activities. We need to look at other measures through a global prevention approach that provides the same guarantees to contain the spread of the virus.
The level of activity is falling in one sector, namely in companies that are active in products, techniques for the installation, maintenance and operation of buildings, infrastructure and facilities and industry. Whereas they still ran 60.6% of their activities for the same period the previous year between 20 and 27 March, that level is now 51.5% (-9.1%). It is important to note that non-essential maintenance tasks are now being relegated to the backburner and that it is not always technically feasible to comply with social distancing in such activities, which means that this is not possible for the time being.
Supply problems continue to be important. No fewer than 61.5% of companies are affected, particularly due to intra-EU supply chain issues (58%). In particular, the shutdown of companies in other EU Member States is disrupting the supply chain. France and Italy are cited most often in that respect. Problems at customs, trade and transport are rather limited but can be important for certain specific products nonetheless. Companies are charging higher freight rates, however, primarily for air transport (12 %).
Nearly 30% of companies cannot yet estimate what their loss of turnover for the rest of the year will be. This is also because they must first ascertain whether it will be possible to continue or to resume production – in compliance with the social distancing measures of course, while at the same time meeting the challenges we face in terms of the supply of goods and raw materials, where there are many problems already. Twenty percent of companies now think they will lose 25% of their turnover in any event.
In order to offset the drop in the level of activity, the number of people in temporary unemployment continues to rise. No fewer than 45% of the people working in the technology industry are at least partially temporarily unemployed at this time. The highest figures can be seen in the aerospace, security and defence sectors. Nine out of ten people are temporarily unemployed in that sector, followed by the manufacturing industry and companies active in products, techniques and services for the installation, maintenance and operation of buildings, infrastructure and facilities and industry. These are precisely the sectors where technical solutions to complying with social distancing are not always available. The lowest figures are found in the digital industry (13%) and the telecom sector (7%). Nine out of ten companies claim to be sufficiently supported by temporary unemployment measures.
On the positive side, absenteeism in the technology sector has dropped slightly from 9.8% two weeks ago to 7% today. Fewer people are sick, especially in the aerospace, security and defence sectors. The number of sick people has dropped from 16.9% to 8.9% in the first group, and from 19.7% to 9.2% in the second group.
Agoria also insists on a smooth implementation of the bank plan. This plan, which is crucial for avoiding a deep recession, must pave the wave for banks to provide bridging loans to companies that are experiencing liquidity problems because of the coronavirus crisis.
According to Agoria’s latest survey, four out of ten technology companies with fewer than 100 employees already benefit from financial and fiscal support measures. 14% of all technology companies are already faced with financial problems, insufficient funds on their accounts, or credit insurance difficulties. Companies are also complaining that invoices are paid less quickly and support the call to avoid a domino effect of unpaid invoices.
The survey was conducted by telephone between 7 and 10 April among 333 technology companies, including 92 SMEs, 120 companies with a workforce of 50 to 150 employees, 81 companies with 150 to 705 employees, and 40 companies with more than 750 employees. 40% of the companies surveyed stemmed from the manufacturing industry. These companies together account for 33% of employment and 38% of turnover in the technology sector in Belgium. Agoria will repeat the survey every two weeks.
- Download the results (987 kB)