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Turnover per employee indicates status of crisis' overcoming

Crisis indicator in German machinery industry in 2020 at trough since crisis' end 2011

Update October 15th, 2021 - The machine-builders have been hard struggling to overcome the deep fall of production and turnover by the world economic crisis 2008/2009.

 

That also still applies twelve years after the outbreak of this crisis. The depth of this crisis as well as its duration belongs to the structural changes that have been developing in the course of industrial production in the leading industrialized countries since the year 2000.


In 2020, there was now a further slump, which had already been announced in previous years in 2018 production and 2019 sales. A report sheds more light on this.

We would like to document how companies depending on their sizes are struggling to overcome the new crisis and which sizes of firm is doing more easily in this context.

As the industry analysis shows, the machinery industry consists of companies with a range of different sizes.

Machine-building companies distinguished according to their size

For this purpose we divide the machinery industry into six sizes of company classes according to the numbers of the Federal Statistical Office for 2020 1. These are machine-building companies with


  • fewer than 50 employees (42% of the companies 2020)
  • 50 to 99 employees (23%)
  • 100 to 249 employees (21%)
  • 250 to 499 employees (9%)
  • 500 to 999 employees (3%)
  • 1,000 and more employees (2%).

Turnover per employee indicates crisis level and overcoming crisis

The code number, which is to clarify to us the overcoming of the crisis effects, is the turnover per employee. The employees in the mechanical engineering companies operate with full commitment. On the other hand, the turnover they generate considerably depends on the worldwide market conditions.

 

How did sales per employee develop overall in the mechanical engineering sector in 2020? What are the differences between the six company size classes?

Crisis indicator breaks 2020 to the lowest point so far since the crisis was overcome in 2011

The diagram shows the results for the entire machinery industry. The turnover per employee is set to 100 for 2008 so that it becomes clear at a glance, whether this code number is now above, equal or below the pre-crisis level.

The result: The turnover per employee exceeded its pre-crisis level (=100) in 2014 with 100.5 for the first time, therefore confirming the crisis' end in the German machinery industry.


In 2019, the crisis indicator is already pointing downward. In 2020, at 97.4 index points, it is now lower than at any time since the upward trend from the crisis trough in 2011.


This means that 2020 is the most severe crisis year since the upward trend from the last global economic crisis in 2009/2009.

Sales per employee in German machinery industry from 2008 to 2020 as crisis indicator.


How affected this crisis slump the six company size classes?

Machine-building companies with 500 to 999 employees showing the best value of the crisis indicator 2020

The crisis indicator as turnover per employee is back to 100 for 2008 for each company size category.


The crisis slump in 2020 was different in the individual company size classes. For this purpose, we compare the crisis indicator of the company sizes with the average value for the machiner industry of 97.4.


Three company sizes cope with the consequences of the crisis with above-average success:
  

  • Larger companies with 500 to 999 employees (crisis indicator 112.6)
  • Smaller firms with fewer than 50 employees (99.4) 
  • Smaller companies with 50 to 99 employees )99.3).


Mechanical engineering companies with 500 to 999 employees (light blue line) were the most successful in coping with the crisis slump. At 112.6 index points, their crisis indicator significantly exceeded the average level of 97.4.


The smaller mechanical engineering firms with fewer than 50 employees (dark brown line) and with 50 to 99 employees (dark red line) also achieved above-average crisis indicators of 99.4 and 99.3 respectively, signaling their above-average ability to overcome the crisis.


Firms with 100 to 249 employees (green line) show below-average success in overcoming the crisis. Their crisis indicator is below average in 2020 at 95.0.

Mechanical engineering firms with 250 to 499 employees (purple line) have the lowest crisis indicator at 89.9.

Sales per employee regarding company sizes in German machinery industry 2008 to 2020.

Large companies with 1,000 or more employees (light brown line) show a below-average crisis indicator of 93.8 index points.


What does this reflect?


Against the background of the global economic crisis demand for large new plants is declining or stagnating. Existing plants are used for longer or are only partially modernized.


Added to this is the US policy of "America first". American sanctions against Russia, Iran and, to an ever-increasing extent, China are imposed as international law and violations of them are sanctioned. "America first" thus restricts the sales markets for non-American competitors.


This is the current "American way of life" to extract the greatest possible advantages for American companies from the global economic crisis.

Turnover per employee in Euro

Finally still for information the absolute numbers for the code number turnover per employee.

Sales per employee and sizes in German machinery industry 2008 to 2020.

The average turnover per employee in the German machinery industry is €219,316 in 2020. Its range is €122,117 from the lowest to the highest value, i.e. 55% of the sector average, ranging from €148,003 with firms with fewer than 50 employees up to €270,120 with companies with 500 up to 999 employees.

 


1) As well known all companies of the manufacturing sector are legally with 20 and more employees committed to report production, turnover, employees among others to the Statistical Offices. So these numbers are therefore very reliable.

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