New research from reichelt elektronik shows that European industry is investing in the future
The ongoing coronavirus pandemic and the resulting economic impact have created major challenges for companies across Europe despite record levels of government support. Nevertheless, it appears that companies are looking ahead and preparing for the future. A new survey commissioned by reichelt confirms that European companies are investing primarily in digital transformation.
The research survey was run by reichelt elektronik with global research provider OnePoll and included 1,500 participants from Europe, across Germany, Italy, France, Austria, the Netherlands and Switzerland.
Investment: Industry is planning for 2021
European industrial businesses plan to invest an average of 6.6 percent of annual sales in 2021. 77 percent of those surveyed say that they are planning more investments compared to the previous year and therefore appear to be defying poor forecasts. Nine percent plan to invest the same amount while 14 percent plan to cut back on investment. This shows a more positive picture than many expected.
Investments are made primarily in the areas of new technologies (50%), IT (46%), technical equipment such as machines and tools for production (30%) and research and development (30%). Even during the crisis, respondents are looking ahead to make their company fit for the future. The biggest motivation behind investing is the will to stay competitive (57%). 50 percent say that investments are necessary to ensure that all processes run smoothly. Interestingly, 28 percent state that the coronavirus pandemic has had a positive financial effect on their business and that more investment is therefore possible.
On the other hand, there are companies that will have to cut back on their investment next year. Most of them plan to invest 5-10 percent less. The primary reasons are the pandemic and its effects (61%) as well as an expected lower economic output in the next year (57%).
Focus on digital transformation
Digital transformation in all areas of the business is very important to most companies. Around two thirds of the respondents cite this task as one of the top priorities (37% as their first priority, 35% as their second priority). 54 percent of the participants are planning new acquisitions in this area, while 44 percent would like to expand and improve existing solutions.
Investing in automation is also very important. 29 percent are planning new acquisitions, while 53 percent want to upgrade existing automation solutions. It is similar with the expansion of the Industrial Internet of Things (IIoT): Here, 30 percent are planning new acquisitions. 37 percent even state that they are planning new acquisitions to make the most of the expansion of 5G technology.
Invest in the future and survive the crisis
“The uncertainty about how the situation will develop, the fear of a second lockdown and the question of how long the pandemic will keep the world and therefore also economic events in suspense are factors that have to be taken seriously as they cast their shadows on the economic strength of companies”, comments Ulf Timmermann, managing director of reichelt elektronik. “It is gratifying for us to see that businesses have not been paralyzed by this. Now is the most important time to stay optimistic, show a fighting spirit and invest confidently in new solutions. This is the only way companies can keep up with the rapidly changing pace of the global economy. To do this, they must be smarter and more flexible and quickly adapt to changing circumstances. Nothing helps them more than investing in new, intelligent technologies.”
