Indications of reduced capital expenditure in the baking sector
Dallas — According to statistics from the Baking Equipment makers and Allieds (BEMA) Intel Member Pulse Survey, a notable decrease in the business outlook for makers of baking equipment developed in the second quarter of 2023.
The results were presented on September 26 during the BEMA and American Bakers Association-organized Nexus inaugural conference, prior to an overflow instructional session. Attendees were given a glimpse of the data collected on a quarterly basis by Cypress Research president Marjorie Hellmer for BEMA Intel.
A deterioration from 9% in the first quarter and 17% in the second quarter of 2022, 24% of equipment makers that responded to the Intel poll in the second quarter of 2023 stated the outlook for business was very or extremely poor. The second quarter’s negative reactions were at their greatest since the COVID-19 pandemic’s climax in the second quarter of 2020.
Comparably, 31% of respondents reported lower second-quarter bookings than first-quarter (24%), second-quarter (2022) 15%, and first-quarter (24%). Once more, this decline was the worst since 2020’s second quarter.
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When Ms. Hellmer broke down the data further, she found that the sales trends for customers in restaurants and foodservice were the lowest, while the trends for customers in retail, commercial, and distributor businesses were more neutral.
In the second quarter of 2020, equipment manufacturers’ top issue was still rising material costs, but the level of anxiety decreased, with 51% of respondents mentioning costs as a source of concern. The proportion had decreased from a peak of 91%. Concern about other issues has grown in the interim, most notably the US economy’s worsening tendencies.
After the presentation, a well-known equipment maker confirmed over the background that sales declined in the second quarter and continued to decline in the third.
He questioned, “Is it a shift back toward pre-COVID capital spending levels?” Perhaps. During COVID, substantial investment was made. Not just baking, but the whole food business is experiencing a downturn. It’s the COVID hangover, rising interest rates, and the disappearance of government funding. Though it has slowed, investment has not stopped.