Corona Virus - Damage To The Automation Industry

No, not literally damage to equipment. lol

What kind of impact do you think the virus and panic will cause on manufacturing and Automation companies?

Do you think companies will slow down automation initiatives?

It seems people are buying consumer goods faster than ever right now, so I imagine the demand on manufacturing will remain high. What do you think?


I'm not an analyst or even close, but I keep reading allot of negative remarks on LinkedIn. Please share your thoughts.

Would it be anything like the 2008 recession? Sorry to ask dumb questions. I wasn't working in this industry during the last recession.

Timeismoney08 said:

No, not literally damage to equipment. lol

What kind of impact do you think the virus and panic will cause on manufacturing and Automation companies?

Do you think companies will slow down automation initiatives?

It seems people are buying consumer goods faster than ever right now, so I imagine the demand on manufacturing will remain high. What do you think?


I'm not an analyst or even close, but I keep reading allot of negative remarks on LinkedIn. Please share your thoughts.

Would it be anything like the 2008 recession? Sorry to ask dumb questions. I wasn't working in this industry during the last recession.

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I'm more worried about it affecting the suppliers of the goods necessary to produce our products. Our supply chain has been disrupted in a few angles by unrelated large scale issues lately of which we have no control. Were are thriving today but but as with any production, its over when the raw materials dry up. Nothings ever guaranteed.

I think as far as automation equipment goes this will make more factories think of using machinery instead of people that can get sick easily.

I have one good customer that tries to replace paid employees with automation equipment wherever and whenever they can, just counting the wage of a person doing something manually or single piece operation.

I think the recession is going to be severe.
Money is already fleeing from shares and go to safe havens (gold, and bonds of "safe" countries (*)) instead. That will hinder investments, which will hurt automation a lot.

Winners:
Anything that has got to do with sanitizing.
Anything that has to do with working at home, studying at home or entertainment at home.
Companies that deliver food and household items directly to your doorstep.

Losers (to the point of going bust):
Movie theaters, sports venues, shopping malls, restaurants, air travel, hotels.

All other industries will be hurt by some degree.

*: For example Denmark my own country. The yield on government bonds is negative (!). Yes, foreign investors are willing to PAY the danish government to have us take their money. I am not kidding. Because of that real estate interests are very low right now - near zero. I am considering remortgaging my house because of that.
That is just an indicator that investors are really scared right now.

I expect the biggest short term effect will be disruptions in the supply chain.
Longer term, I expect that major capital projects still waiting for approval will continue to wait until the corona virus situation is clarified. Projects already approved will probably continue, although they may be scrutinized to see if they can be delayed without penalty.


Two personal vignettes:
1. This morning I learned that all public buildings in the town where I live are closed today for disinfecting after a town resident has been declared "presumed infected". He presented at a nearby hospital with all the symptoms, has been tested and is awaiting results of the tests.
2. An acquaintance of mine spent some time on a treadmill at the gym. A resident of my town was on the adjacent treadmill. Her husband, a guidance counselor at a nearby high school, not a member of the same gym, was told not to come to work for a week because of his potential exposure.
I agree with Ken Roach that an abundance of caution is appropriate here, but where is the line between an abundance of caution and panic?


[Sarcasm]Read this post at your own risk. I potentially have been exposed to the corona virus and I am in the higher risk demographic.[/Sarcasm]

I was lucky to be changing jobs and pulled my money out of my old 401k for the rollover right before the down turn happened... now I'm shamelessly cheering the further south the S&P 500 goes before I put my skin back in the game.

Unless some one is sneezing on the HMI and your licking it you have a better chance of getting the flu. More people die from the flu than the Corona virus. People are over reacting to the Corona, in my opinion.

bright676 said:

Unless some one is sneezing on the HMI and your licking it you have a better chance of getting the flu.

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This is demonstratively wrong. Dont spread misinformation.
Covid-19 is extremely more infective than regular influenza. You merely have to have been near to an infected person (not sneezing).

The reproduction rate (*) of influenza is around 1.3
The reproduction rate of Covid-19 is around 3.0
So Covid-19 spreads much more rapidly. Since it causes a chain reaction, the increase from 1.3 to 3.0 is more serious than it appears at first glance.

* The reproduction rate is how many further persons on average are infected by each already infected person. A rate of 1.0 would mean that the number of infected people would not increase. Above 1.0 means that the virus spreads. So going from 1.3 to 3.0 is a very significant increase.

This is my source:
https://www.livescience.com/new-coronavirus-compare-with-flu.html

bright676 said:

Unless some one is sneezing on the HMI and your licking it you have a better chance of getting the flu. More people die from the flu than the Corona virus. People are over reacting to the Corona, in my opinion.

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Unless you are a Virologist then your opinion is pretty irrelevant.

Your attitude is likely similar to the one that Italians took and the reason they are in the mess they are in.

Steve Bailey said:

Longer term, I expect that major capital projects still waiting for approval will continue to wait until the corona virus situation is clarified. Projects already approved will probably continue, although they may be scrutinized to see if they can be delayed without penalty.

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I have already seen the hesitation in spending, not only the coronavirus but the 10yr is at a all time low (and may go negative) also oil is dropping like a rock and they are all three feeding off each other, if you are a CEO and your stock has been cut by 20% you just cant justify spending money on capital projects and only equipment being down will get money.

The company I work for manufactures capital equipment. We have been seeing a slow down since before the coronavirus was an issue. So on the capital equipment side things were already softening. The coronavirus outbreak is just going to make it worse.

I think geniusintraining is right about the capital equipment side of things. A manufacturing plant will be hard pressed to justify the purchase of a piece of capital equipment whether they need it or not when the value of their company dropped out from under them for no fault of their own. So they will make due with what they have as long as they can.

Specific to automation, I don't think it will have as big an effect on the "hard" side of the equation; things like PLC's, drives, contactors, circuit protection, etc. At least in my experience from the company I work for, when things are soft machine users are more likely to upgrade controls only on a machine they already have than to buy a new machine. We are already seeing more interest in that path from our current customer base. I think the portion of the market that will get hit is the analytics segment and all the support stuff that goes with it. That segment will make you money tomorrow. Upgrading your machine to get another 10 years and 10% production out of it makes you money today.

Keith

JesperMP said:

I think the recession is going to be severe.
Money is already fleeing from shares and go to safe havens (gold, and bonds of "safe" countries (*)) instead. That will hinder investments, which will hurt automation a lot.

Winners:
Anything that has got to do with sanitizing.
Anything that has to do with working at home, studying at home or entertainment at home.
Companies that deliver food and household items directly to your doorstep.

Losers (to the point of going bust):
Movie theaters, sports venues, shopping malls, restaurants, air travel, hotels.

All other industries will be hurt by some degree.

*: For example Denmark my own country. The yield on government bonds is negative (!). Yes, foreign investors are willing to PAY the danish government to have us take their money. I am not kidding. Because of that real estate interests are very low right now - near zero. I am considering remortgaging my house because of that.
That is just an indicator that investors are really scared right now.

Click to expand...

Automation Winners:
Anyone who can hop on a project, with little notice, to keep it running because of any stall, caused by or related to the issue.