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Rubber Industry Pulse Survey


 

To better understand the overall impact and future state of the rubber industry, ARPM is conducting a weekly Rubber Industry Pulse Survey. This 8-question survey takes less than one minute for leaders to complete but gives insights into how the rubber industry is faring so far - and what executives are anticipating for the future. Participate each Monday morning through your personalized e-mail link to get the results sent to you every Thursday. (Request e-mail link) As ARPM continues to collect information, we will begin to trend and make predictions based on the inputs given by rubber industry leaders. 
 

For clarity, throughout the rest of this analysis:

  • Week 1 refers to data collected on April 20-22: 32 Respondents
  • Week 2 refers to data collected on April 27-29: 113 Respondents
  • Week 3 refers to data collected on May 4-6: 69 Respondents
  • Week 4 refers to data collected on May 11-13: 96 Respondents
  • Week 5 refers to data collected on May 18-20: 93 Respondents
  • Week 6 refers to data collected on May 26-28: 105 respondents
     

Week 6: Data collected May 26-28

This week’s data was provided by 105 organizations. Participating companies serve 18 different primary industry segments. The most common primary industries typically served by respondents this week include Industrial, Automotive, and Construction. Each of these primary industries will have its data from this week highlighted throughout this article.
 

At what level is your plant currently operating?

Compared to one week ago, operations have seen slight but positive changes, with more companies at full production and 50-75% production. There were also no companies completely shut down this week.

As of May 19, a majority of states have begun partial re-opening, many acknowledging the need for manufacturers and construction to reopen again.  To stay updated on where each state is in their re-opening plans, visit this map

  • Industrial
    • 68% of organizations that serve the Industrial Industry are at full operations, which is down from last week (74%). 26 percent of respondents are at about 50-75% production. 6% of respondents are at 25-50% of production, which is down from last week. 
  • Automotive
    • Looking at just one week ago, there is some indication those in automotive are operating at a higher level than in the last three weeks, as automotive companies are pushing to reopen US factories. 
    • 82% report operations at 50 percent or above (up from 52% last week). 26% of automotive manufacturers indicate they are operating at about 25-50%, which is constant from last week.
    • 16 percent are operating at less than 25% (down from 31 percent last week). Also, there are no companies that are totally shut down this week.
  • Construction
    • Rubber processors primarily serving the construction industry saw an improvement in production from last week, with 50% in full operations and 50% in 50-75% production.
    • There are zero respondents at less than 50% of production, an improvement of 14% from last week.
       

What percent of your customers are shut down?

Continuing the trend, there has been a positive change in the percentage of rubber companies reporting their customers are shut down. Just as with manufacturers, many rubber companies' customers are having to evaluate their business operations. There was an 11% increase in companies with no customers shut down and is now over one-third of companies (34%). About one-third (32%) is only 10% of customers shut down.

  • Industrial
    • 90% percent of Industrial Industry manufacturers have at least 80% of their customers open, and the remaining 10% are at 50%.
  • Automotive
    • As of May 28, automotive manufacturers' customers remained shut down at higher levels compared to other industries, but the situation has improved from last week.
    • 61 percent of companies primarily serving the automotive sector report that 20% or less of their customers are shut down, which is a huge improvement from last week’s 28 percent.
    • 24% indicate that 30-60% of their customers are shut down, and 16 percent are reporting 80% or more of their customers are shut down, both of which improved from last week.
  • Construction
    • 67% of companies serving the construction industry indicate that none of their customers are currently shut down, which is up from last week’s 29%.
    • Another 22% report that about 10% of their customers are shut down right now.
    • 11 percent of processors in this segment indicate that 30% of their customers are shut down, and no respondents indicated more than 30% of their customers being shut down.
       

At what level are you currently staffed?

As customers continue to reopen and operations are ramping up for many rubber companies, employers can call employees back to work. The percentage of companies reporting they are fully staffed went back to where it was 2 weeks ago at 61%. However, the number of respondents at less than 50% staffed and fully shutdown decreased. We are hoping to see more respondents at full staffing as time goes on.

  • Industrial
    • The Industrial manufacturers are seeing consistent staffing levels, with 74% at full staffed and 13% at 75% staffed. 
    • There are still no companies at less than 50% staffed, which is consistent with last week. 
  • Automotive
    • 69% of companies primarily serving automotive are staffed at about 50-100%, up from last week’s 59%.
      • 32% - 90-100% staffed
      • 21% - About 75% staffed
      • 51% - About 50% staffed
    • 32% are staffed at less than 50% and zero percent are completely shut down, both of which are improvements from last week.
  • Construction
    • 40% of companies primarily serving the construction marketplace are staffed at 90% or higher, which is a big decrease from last week (57%).
    • 60% report being at 75% staffed and 0% report being about 50% staffed, and improvement from 29% last week.
       

Have you received Payroll Protection Funds?

Week 4 was the last week respondents were asked about PPP funding, as 94% had either received funding or did not apply. However, it is important to note that the majority of companies, 58%, were able to access critical PPP funding during either the first or second round. The full impact of this is yet to be seen. The PPP funds have left many organizations with questions, and companies are reporting that it is not necessarily providing the relief they had hoped, or they need more clarity on the scope of forgiveness for these funds. For FAQ’s regarding PPP funding, click here. 
 


Are you experiencing supply chain issues that impact your ability to produce?

Supply chain issues improved greatly from last week. Although the number of companies at moderate issues stayed constant, there was a 12% shift from minor issues to no issues, with almost half of companies (44%) now with no issues. There continues to be no companies with major disruptions. 

  • Industrial
    • Industrial manufacturers saw improvement from last week, with a 10% increase in respondents with no issues in supply chain.
    • 55% indicate minimal issues, and only 3% indicate moderate issues.
  • Automotive
    • Automotive companies are reporting no major supply chain issues, with 53% indicating no issues, a big improvement from last week’s 32%.
    • 42% report minimal issues, and only 5% report moderate issues.
  • Construction
    • Rubber processors in the construction markets saw more supply chain issues than last week, as 30% indicated no issues, down from 43% last week. 
    • The other 57% indicated only minor disruptions.
       

In terms of future staff planning (next 6-12 months), we are...

To better understand overall future planning, companies were asked about their near-future staff planning, or how staffing would change over the next 6-12 months. Compared to last week, there have only been minor changes. Fewer companies are looking to maintain staff, and those that changed were split between reducing staff and adding staff.

  • Industrial
    • Following the negative trend of production for industrial manufacturers, more respondents indicated they were looking to reduce staffing levels compared to last week. 20% are looking to reduce staff compared to only 6% last week.
    • However, the majority (70%) of companies serving the Industrial Industry are looking to maintain staff levels. 
  • Automotive
    • Although previous survey questions indicated a positive outlook for the automotive industry, this question does not match the trend.
    • There was a 10% decrease in companies looking to add staff.
    • Most companies serving the automotive sector are still looking to maintain staff (63%).
    • 32% percent are reporting some type of permanent or semi-permanent staff reductions for the near future, up from last week of 26%.
  • Construction
    • 30% percent of executives report they are either looking to add staff, up from 14% last week.
    • 50% are looking to maintain staff levels over the next 6-12 months.
    • 20% percent did report that there will be at least some permanent or semi-permanent staff reductions, down from last week (29%).
       

How are you forecasting revenue through the end of 2020?

While the industry is changing rapidly, executives were asked how they are currently forecasting revenue through the end of 2020. Each week, this data changes slightly as processors get a better lens through which to view the rest of the year. As of Thursday, May 28, 30% were forecasting at 95% or above of their 2020 forecast (up from 23% last week), and another 60% are anticipating coming in at about 75% of their 2020 forecast. Just 7 percent of companies say they anticipate revenue through the end of 2020 to be about 50% of the 2020 forecast, down from last week. Four percent of processors report forecasting revenue at less than 50% of the 2020 forecast, which has not changed from the last two weeks.

  • Industrial
    • Revenue forecasts for the Industrial Industry did not improve from last week, as there was a 10% increase in companies at 50% of their 2020 forecast. That 10% came from companies at 75% of their 2020 forecast last week.
    • 29 percent of companies are at 95% or above their 2020 forecast, which is relatively the same from last week.
  • Automotive
    • 67% of companies serving automotive are forecasting revenue through the end of 2020 at about 75%+ of the 2020 forecast, down from last week’s 72%.
    • 17% anticipate revenue through the end of 2020 to be at about 50% of the 2020 forecast, up from last week’s 11% 
    • 11% of respondents reported less than 50% of their 2020 forecast, the same as last week.
  • Construction
    • There was very little change from last week regarding revenue forecasting in 2020.
    • At forecasting through the end of 2020:
      • 30% report 95%+ of 2020 forecast
      • 70% report 75% of 2020 forecast
         

At this time, with the information currently available to you and your team, when are you anticipating production levels to return to "normal"?

Added to this Pulse Survey in Week 4, company leaders were asked to look forward and share when they believe they will experience the elusive "return to normal" or pre-COVID-19 production levels. Expectations are spread between all months of 2020 and 2021, with no time having more than 30% of respondents. At this point, most respondents either believe normalcy will return before Quarter 4 or sometime in 2021, as only 10% of respondents chose October, November, or December. Expectations improved as there was an increase in companies that indicated May. However, there was also a shift of respondents toward September (an increase of 9%).

  • Industrial
    • Of those primarily serving the industrial market, 30% report that production levels have not been impacted, up from 22% last week.
    • 19 percent believe they will return to normal sometime before August, 22% expect a return after July but before October, and the remaining 30% do not expect production to return to normal until 2021.
  • Automotive
    • Expectations for the automotive industry are much worse compared to other industries, with only 5% having not been affected and only 6% predicting a return by the end of June. 
    • 35% indicate they do not believe production levels will return to normal in 2020, which is the same as last week.
  • Construction
    • Eleven percent report that production levels have not been impacted, way down from 40% from last week.
    • 44% predicted returning to normal before August.
    • 11% do not anticipate production levels to return to normal during 2020, down from 40% from last week.
       

Remember to check this site every Thursday for the weekly update. If you have suggestions for questions to be added or changed, please e-mail ARPM's Managing Director, Letha Keslar, at lkeslar@arpminc.org.