Smart industry

How big impact does
Covid-19 have on the manufacturing industry?

How big impact does Covid-19 have on the manufacturing industry?

- Less than you think

While we know that the situation is tough in many places due to Covid-19, several of our customers in the manufacturing industry continue to roll on at a reasonable pace, despite the fact that the order entry in the spring of 2020 was briefly lower than during the financial crisis of 2008-2009.

 

The order entry fell, but quickly bounced back to almost the same levels as before the pandemic. During the autumn and winter of 2020 and spring of 2021, we will once again have sharper pandemic restrictions in countries around the world. How does this affect the Swedish industry? Is the demand emerging as sharply or will we see the same pattern of rapid recovery as last spring?

 

Increased order entry

Recent figures from Statistics Sweden (SCB) show that we have seen increased order entry for Swedish industry in late autumn, which indicates that the increased spread of infection and the sharper pandemic restrictions have not affected the market in the same way as in spring 2020.

Unexpectedly strong recovery

Despite the pandemic’s challenges, the order entry for Swedish manufacturing industry as a whole increased by 5.7% in November 2020 compared with the same period in 2019. Order intake also increased by 3.8% in November 2020 compared with the previous month. This is according to figures from Statistics Sweden.

 

tillverkande industrin covid-19 statistik

Manufacturing industry

Better equipped now than during the financial crisis of 2008-2009

Another indicator of how things are going for Swedish industry is the National Institute of Economic Research’s Business Tendency Survey, where a number of indicators are presented each month in business and households to give an overall picture of the economy in Sweden.

Despite the fact that the order entry during the pandemic was briefly lower than during the financial crisis of 2008-2009, the Swedish manufacturing industry is better equipped this time.

In addition to the pandemic making a much shorter notch in the curve, you can see clear similarities between this and the financial crisis.

Clear similarities with the financial crisis

The manufacutring industry follows the fluctuations in the general economy while the hot building industry lags behind, avoids diving as low and takes longer time to recover.

The manufacturing industry recovered worse than the general economy after the financial crisis, but is making a significantly better recovery this time. Why?

Best in Europe in digitization?

Swedish industry has for a long time had high competitiveness compared with the rest of the world. In 2020, the World Economic Forum in its Global Competitiveness Reort “How Countries are Performing on the Road to Recovery” made the aspsessment that Sweden, together with Finland and Denmark, has the highest “Economic transformation readiness” in the world.

The value aims to clarify how well a country can handle major changes (in this case the pandemic) and is based on how agile the state, industry, market and population are together to meet a changing reality.

In total, Sweden is in 8th place in the world on the Global Competitive Index in the same survey.

 

According to the European Commission’s European Innovation Scoreboard 2020, Sweden is also the best in Europe in terms of innovation.

european innovation scoreboard 2020

It is no coincidence that Swedish industry copes well with the pandemic

The Swedish industry has been at the forefront for a long time. Our view, however, is that the manufacturing industry has taken great steps towards automating and digitizing manual processes, especially during the past five years. Under the pressured situation we are now in, this becomes extra clear.

Swedish industry is not only well equipped but has also a unique position where, based on statistics, we have obviously worked up a head start compared to most of the world’s heavy industrialized countries.

The McKinsey Global Survey in February 2021 asked thousands of business leaders how the pandemic is affecting their business. Those who have digitized their operations according to Industry 4.0 are those who have suffered the least damage.

 

What do we learn from this?

How should we work forward?

With 35 years in the industry and continuous contact with our ~ 1700 customers, Cadcraft have insight into the challenges and opportunities that Swedish industry faces.

We work daily with digitization projects at our customers and feel that there is a great drive to achieve higher efficiency and increased competitiveness.

 

Challenge yourselves

The projects that are most successful are those where there is an open and unpretentious dialogue with representatives from the company’s various departments. ALL processes can be more efficient. A minimal amount of extra work in one department can provide enormous efficiency gains in the next department in the chain.

 

Cadcraft Discovery Workshop

Cadcraft Discovery Workshop is a process that is often used to find where the potential lies in the company’s operations, what return different efforts provide and how they should be prioritized.

 

More inspiration

In our publication “Smart Industry – Digitize or die”, we discuss how the Fourth Industrial Revolution forces Swedish industry to digitize in order to continue competing in an increasingly global market, and what government resources are available to get help to digitize.

In “Smart Industry – Three steps to increased competitiveness“, we go in depth with concrete efforts that industrial companies can make to increase their competitiveness.

Contact us for more information

 

 

Daniel Marcus

Key Account Manager