Progetto Fuoco survey: the wood burning sector respond to the consequences of the coronavirus lockdown
This is the spirit in which in mid-April – in the middle of the lockdown to fight the coronavirus epidemic – Progetto Fuoco decided to launch an online questionnaire for its partners and exhibitors. We asked them some questions in order to gauge feelings in the sector, to understand the repercussions of this unprecedented situation, and to discover the strategies that are now being employed to cope with it, as well as the measures that may help us to recover from it. It doesn’t purport to be objective, but rather to keep people connected, pooling our thoughts on how to bounce back. The re-opening of manufacturing and wholesale commerce on the 4th of May – the so-called Phase 2 – is the first real test.
Strengthening pre-existing schemes to support demand, like Ecobonus and Bonus Casa, but also supporting credit and unemployment benefits for companies: these are the most urgent measures according to the voluntary and anonymous responses to our questions. Out of every 10 companies surveyed in the wood-fired heating sector, 4 are involved in manufacturing and 6 in distribution. Uncertainty is the prevailing sentiment, reflecting the feelings of ordinary citizens, in Italy and around the world.
The results of the survey
With the help of some infographics, let’s examine the results of the survey, starting from the beginning.
How much have the Covid-19 crisis and the subsequent containment measures affected revenue? Almost half of all companies (47%) have seen revenues collapse by 75% or more in recent weeks, compared to the same period in 2019. For one in five companies the fall has been between 50% and 75%, and for 22% of companies the fall has been between 25% and 50%.
The crisis is hitting manufacturing companies harder: 52% of them have lost more than 75% of their revenue, a figure which among distribution companies falls to a still shocking 44%. These figures aren’t surprising, considering that 65% of manufacturing companies have come to a complete standstill during the lockdown, and 26% have been partially closed. Only 6% have been able to continue working while respecting the safety regulations imposed as part of the measures against Covid-19 agreed by the government and social partners.
What strategies have our partners and exhibitors adopted to avoid their businesses coming to a complete halt, and to devise new development pathways? The answers tell a two-sided story. Few companies (9%) have invested in creating or improving e-commerce or home delivery systems. Many more companies report having increased investment in research and development aimed at creating new products, as a result of the spread of the SARS-CoV-2 virus. 39% of surveyed companies think that this crisis will lead to the creation of new products and new market segments.
Which products will consumer preferences shift to? Our survey revealed numerous ideas and suggestions: cheaper products, at low cost and which guarantee high output and efficiency, modern fireplaces, wood-fired boilers, pellet stoves, small stoves, and eco-friendly systems.
In terms of commerce, we wondered in which directions Mass Market Retail will move in order to respond to the new needs created by obligatory social distancing. We asked our partners and the answer 71% of them gave is that large retailers will strengthen – as they are already doing – their online purchase and home delivery systems. Looking ahead to next winter, the uncertainty caused by the very real possibility that we may have to live alongside the virus, finding new ways to work and socialise, are reflected in an unclear view of the economic future. More than three quarters of respondents (76%), are unsure of what to expect regarding the future of their company. 17% were pessimistic, expecting negative consequences. Only 7% of exhibitors and partners were optimistic about the future, having positive expectations despite the current challenges.
What does the market need?
Moving on to the economic measures the market needs in order to bounce back after the novel coronavirus, the most popular among the options we presented to respondents was the strengthening of the Ecobonus and Bonus Casa for families, which 29% of respondents considered to be necessary. In second place is support for credit for companies, essential according to 26% of respondents. 14% think more support for unemployment benefits is an urgently needed measure. The enlargement of tax credits by the government met with the approval of 12% of respondents. One in ten of our surveyed companies thinks greater investment in research and development is necessary, while one in twenty thinks that mergers and partnerships between companies would make them more competitive in an ever-tougher market. The remaining 4% proposed solutions such as the government providing injections of non-repayable liquidity for companies, and a drastic reduction in taxes and bureaucracy.
The coronavirus crisis is connected to the collapse in oil prices, an event with the potential to destabilise the global economic balance. When asked how they feel the coronavirus emergency will impact on the wood-fired heating market, 38% of respondents said that the crisis will hinder the sector, with the fall in oil prices playing an important role. 37% feel that the sector will be hindered by factors unrelated to the oil market. 17% feel that the Covid-19 emergency won’t harm the wood-fired heating sector at all, while 8% think the emergency will favour the sector.
The next edition of Progetto Fuoco il scheduled in February 23-26, 2022. Stay tuned for the next edition of Italia Legno Energia, Arezzo (IT) scheduled in February 4-6 February, 2021.