The BRIC countries - Brazil, Russia, India and China - are among the most important markets for the German mechanical engineering industry. The VDMA has now asked its members how the coronavirus pandemic is being overcome in these countries.

According to a recent survey of VDMA member companies in these countries, the situation in China has already returned to normal. Weighted by company size, a third of the local subsidiaries surveyed by the VDMA rate the current business situation as good, while half (51%) rate the business situation as satisfactory. "Our survey results indicate that the upturn in China has reached our members," says VDMA Chief Economist Dr. Wiechers. "However, there are still major differences in the assessment of the respective business situation depending on the sub-sector. Fluid technology, drive technology and electrical automation are particularly noteworthy. The machine tool industry continues to bring up the rear," adds Wiechers. "On average, however, our local members are expecting a mid-single-digit increase in turnover for the current year."

Russia surprises

Perhaps surprisingly for some, the survey results among VDMA members in Russia also paint a positive picture: 49% rate the business situation as good and 48% as satisfactory.

"The Russian market for machinery and equipment is surprisingly robust despite the coronavirus crisis. Exports of machinery from Germany to Russia from January to August were also just above the previous year's level. This makes Russia an exception among the top 10 sales markets for German machinery exporters," summarizes the VDMA chief economist.

Significant impact felt in India

The negative effects of Covid-19 continue to be felt most strongly in India, even though the business situation of companies has improved significantly compared to the spring survey: 11% rate their business situation as good, and 63% now rate it as satisfactory. "The mechanical engineering sector in India was hit much harder than in many other countries due to the severe and far-reaching lockdown at the end of March. For many companies in India, supply chains have not yet fully recovered from this shock," adds Wiechers. "According to survey participants, the mechanical engineering sector in India will not reach pre-crisis levels until 2022, despite positive growth prospects."

Brazil recovers faster

Brazil - the most important sales market and production location in Latin America for the mechanical engineering industry - also appears to be recovering from the coronavirus crisis faster than expected: 26% rate their business situation as good and just under half (49%) as satisfactory. In the spring survey, more than half of respondents rated their business situation as poor. "The rapid recovery in Brazil is reflected not least in the business expectations of our local members. Two thirds are optimistic that their business situation will improve in the next six months. On the other hand, only 3% expect their situation to deteriorate," says Wiechers.

The VDMA surveys its members every six months on current business developments in the BRIC countries. The first survey was conducted in spring 2016, and the most recent survey with a total of around 500 participants was conducted between October 12 and October 30, 2020.