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Law360 (April 29, 2020, 4:46 PM EDT ) A survey released Wednesday by the Association of Equipment Manufacturers found that nine out of 10 executives in the field say the COVID-19 pandemic is having a "very negative" impact on the economy and causing a decline in demand for equipment.
Conducted from April 16 through Monday, AEM said the survey questioned 105 presidents, CEOs and owners of leading equipment manufacturers, companies that manufacture heavy equipment, light equipment, components and attachments. About half of the surveyed companies employ fewer than 250 workers, and 24.2% employ more than 1,000, AEM said.
"The COVID-19 pandemic has had an unprecedented impact on equipment manufacturers and the 2.8 million men and women of our industry," AEM President Dennis Slater said in a statement. "Even before the current crisis, equipment manufacturers were facing challenging times as a result of the protracted trade war with China, the mounting infrastructure crisis and a decline in commodity prices. The COVID-19 pandemic has managed to turn an already dire situation worse."
More than half of respondents said the impact of COVID-19 on the industry is "very negative." Seven out of 10 report a "moderately negative" impact on their supply chain, while a quarter have experienced a "very negative" impact.
The survey comes about a week after Congress broke a two-week stalemate and reached a nearly half-trillion-dollar deal for an "interim" pandemic relief package that includes another $310 billion in forgivable loans to small businesses, $75 billion for health care and $25 billion to boost testing capacity.
AEM also found that 38% of manufacturers expect the outlook for the next 30 days to get worse and plan to lower their financial outlook over that time by more than 30%. A total of 61% said they plan to reduce their financial outlook by up to 30% over the rest of the year, and 79.2% said they would like to see a significant investment in infrastructure to help equipment manufacturers.
"While quick bipartisan action in Congress, including the creation of the Paycheck Protection Program, has helped many equipment manufacturers to date, this survey makes it clear that our member companies need continued support to keep the lights on and workers on the job," Slater said. "The vast majority of them want Congress to prioritize infrastructure investment to help support equipment manufacturers and rebuild the economy."
Another potential boost to equipment manufacturers came last week when House Ways and Means Committee Chair Richard Neal, D-Mass., opened the door to Republican proposals for business incentives such as an expansion of temporary full expensing of business equipment as he looks to build bipartisan support for a Democratic-led virus relief package focusing on aid for states and workers.
--Additional reporting by Andrew Kragie, Alan K. Ota and Xiumei Dong. Editing by Alanna Weissman.
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