The crisis in the industry according to CONCAMIN

To determine the impact and effects that COVID-19 has caused on the economy, industry, and jobs, the Confederation of Industrial Chambers of the United Mexican States, CONCAMIN, has created the "COVID-Industrial", a tool designed to "inform about proposals in response to the COVID-19 pandemic, as well as the closure of job sources and companies that are being registered."

This organization, which since 1918 has developed projects and initiatives to contribute to the economic growth and sustained development of the Mexican industry, has released in its second report "COVID-Industrial."

the repercussions that have arisen in different industries by following the precautionary measures established by the government to mitigate the spread of the virus. As well as data on the perception of companies, collected through surveys conducted in different industrial sectors and throughout the country, disclosed in the presentation of the third weekly report "COVID-Industrial."

How is the industry?

According to the analysis conducted by expert members of different industrial sectors, the industrial activity in Mexico had been declining since mid-2018, long before the contingency caused by the coronavirus which will continue to weaken.

For example, in the manufacturing industry, textile inputs, and clothing manufacturing, it was reported that since 2018 the utilized capacity, of the total installed capacity for manufacturing, has decreased considerably. This situation is repeated in petroleum derivatives, with utilized capacity barely above 40%, and transport manufacturing, which was already showing declines that will continue to be observed due to the closure of plants, to name a few.

The analysis stipulates that if the halting measures continue until May 15, which involve 70% of industrial activity, the sector's GDP may fall by 7.6% during the year, representing a loss of 500 billion pesos, increasing negative consequences.

It is important to emphasize that in the current country situation, where the price of oil has suffered the largest historical drop, "it is crucial to seek the reactivation of the industrial sector, which will be the only mechanism that can link us to the economies of the USA and the European Union when their reactivation begins, and at the same time generate jobs," a delicate point to address because, according to data reported by the Social Security, from March 13 to April 6, 13,000 jobs were lost daily.

The loss of employment represents more than just the source of work, as without a plan, benefits, savings fund, home help, housing, and pension are at risk.

What has happened in companies?

The survey was conducted from April 24 to 27 to a significant number of companies belonging to different industrial sectors, such as construction, food, transportation, chemical, printing, among others, where 88.78% are SMEs.

91.58% of the surveyed companies focus on the domestic market, only 8.42% focus on the export market. While most conduct their activities mainly in the center of the country, 31.99%.

Speaking of the employment situation in the sector, 52.75% have kept all their employees, however, 40.51% have had to reduce their staff.

The 4 biggest problems facing companies are:

• Reduction in product demand - 58.70%
• Liquidity - 56.66%
• Operations shutdown - 56.05%
• Cancellation of purchase orders - 41.51%

Therefore, 59.15% have seen their sales reduced by more than 51%

To know all the questions and answers of the survey, consult the presentation of the third weekly report of "COVID-Industrial."

5 proposals from CONCAMIN to face the crisis:

Formation of a High-Level Group to address the COVID-19 problem.

Together, the public, private, academic, civil society, and workers' sectors will evaluate and develop a comprehensive action program to address the economic and social situation caused by COVID-19.

Promote an Agreement for the Preservation of Employment and the Strengthening of the Internal Market.

It is necessary to promote what is made in Mexico, as public sector revenues will be limited due to the fall in oil prices, so private investment will have the capacity to generate jobs.

Build an Economic Reactivation program with four basic guidelines:

• In the three levels of government, timely payment for goods and services suppliers.
• Develop an emerging basic infrastructure program, of at least 250 billion pesos, applied in the most backward areas of Mexico.
• Special financing program from the Development Bank for strategic sectors and SMEs.
• Accessible credit from the commercial banks.

Establish a calendar for the return to normalization of productive activity.

It is necessary to establish such a calendar to generate certainty for national and international economic agents.

Align Mexico's Essential Sectors with those of its Main Trading Partners.

It is important to recognize the role of Mexico as a supplier in global chains, aligning the essential sectors with those of our main trading partners will ensure avoiding market loss and continuing the important flow of investment that represents technology, innovation, exports, and high-skilled jobs.

For more data on the industry in Mexico and its evolution around the contingency, consult the full study by CONCAMIN.