When facing a crisis, what type and from whom people expect support?

COVID SURVEY by CECE, ERA and LECTURA:

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Covid Special, part 4

Many companies have suffered losses as a result of reduced operations and forced closures. In response to the losses, some institutions provided help and various forms of compensations to facilitate recovery. Partially, the COVID survey focuses on this topic, too. Therefore, we can provide our audience with some information from whom people operating in the heavy machinery industry appreciate the support the most and propose possible explanations of the findings. We compare different groups of respondents (machine owners/contractors/dealers/rental companies) to see whether people, who are operating in different fields of business, favour different types and sources of support and whether the results are generalizable. 

All four groups of respondents (machine owners, contractors, dealers, and equipment rental companies representatives) participating in the covid survey were asked two questions about the help-seeking strategies, which would help us compare the preferences according to the field of business. The general preference of different options and their comparison according to the field of business are presented.

What would help you to invest in your fleet? What is the most beneficial type of support? 

Overall, the majority of covid survey participants agreed on 0% financing as the most beneficial type of support they need when facing a coronavirus crisis. The remaining almost half of respondents would prefer another of the predefined options - delayed payments, rent to buy options, and special leasing. However, some of them would choose another type of help on what we focus on later when analyzing responses for all four groups of respondents.

Machine owners

The majority of machine owners (48,9%) agreed on 0% financing as the most beneficial support their business would need. All remaining options were more than twice less preferred than the option indicating 18, 2% would rather favor delayed payments, 12,6% consider rent to buy options the most helpful type of support, and 11,6% of machine owners would appreciate special leasing. What is interesting, almost 9% (8,7%) of our respondents would rather prefer another type of support. When analyzing their responses, the frequent responses were, for example, improvement in the world economy, financing of small businesses, or discounts. However, also responses indicating no help is needed were quite often. 

Contractors

Then we focused on contractors. Similar to machine owners, the contractors mainly chose 0% financing (41,3%) as the most beneficial type of support. As opposed to machine owners, the second most often chosen option was rent to buy option (20,3%). However, even delayed payment would favor pretty much contractors (17,3%). The remaining predefined option, special leasing, considered 13,8% of contractors as useful, and the last option, another type of help, would need 7,1% of respondents. Overall it is not a negligible result, so we further analyzed these “other” options releasing more financial offers, non-repayable loans, and new investments were quite frequent responses.

Dealers

The next group of covid survey respondents was dealers. However, the dealers, as well as machine owners and contractors, agreed on 0% financing as the most beneficial type of support (45,9%). Contrary to the previously mentioned groups, the second most frequently selected option was delayed payment (25,7%). About 15,6% of dealers would favor rent to buy options, and 11,9% would appreciate special leasing. In the dealers' sample, our predefined options fit well with dealers´ needs. Only 0,9% would prefer another type of support. These responses were not specified. 

Equipment rental companies

Representatives of equipment rental companies were the last group of respondents who had asked about the type of help they need and whom they need help. The results also showed that most of them would appreciate 0% financing (35,6%), followed by rent to buy options (28,9%). 17,8% of respondents claimed special leasing is the most important type of support they would appreciate, and only 11,1% of equipment rental companies representatives claimed they needed delayed payment. The remaining respondents (6,7%) who had chosen the “other” option from whom the most stated they need no help. 

After describing the distribution of various types of support among our respondents, we decided to explore whether the results are generalizable. According to our analyses, the differences between different types of businesses were statistically significant (p < 0,001), which allows us to conclude that every field of business needs different types of support. 

Who do you expect mainly support from?

The second question focused on institutions from whom people expect the support would come. In spite of the fact that option “OEMs” was presented only to dealers and equipment rental companies representatives, and the current results are from the worldwide sample, what quite distorts the interpretation of the results for option “European authorities”, we still provide you with the overall distribution of results. The further analyses targeting separate groups of respondents based on their field of business are presented below and clarify the possible misinterpretations. 

Machine owners

When considering the provider of help, most of the machine owners claimed they do not need support at all (46,9%). However, from those who expect institutional help, the national authorities (28,7%) would probably be the first source of help to whom they expect it. Support from banks favored 13% of machine owners, and 8,1% claimed they would appreciate the help from European authorities. When considering responses only from European samples, the results were similar. The total percent of respondents who expected support from European authorities was 11,6%.

Contractors

The source of help or preference of institutions the respondents would expect help was also analyzed. Similar to machine owners also contractors mostly claimed they do not need institutional support (46,1%). On the other hand, when analyzing responses from those who need institutional support, we found quite different results on contractors´ sample than on machine owners´ sample. Almost the same percentage of respondents would prefer help from national authorities (22,2%), and banks (21%). As with the machine owners, about 8% (8,5%) of contractors expect support from European authorities.  In European sample the percentage of respondents who expect support from european authorities climbed to 10,2%.

Dealers

When focusing on sources of help, whom dealers would expect support from, the question was slightly altered, as opposed to contractors´ and machine owners´ versions of the questionnaire. The option “OEMs” was added. Although, similar to previously presented results, “no support needed” (29,9%) was the most preferred option, too. The newly added “OEMs” option was the second most preferred source of support, and 28% of respondents would favor it. Even support from national authorities would appreciate quite a considerable amount of respondents (20,1%). Contrary to machine owners and contractors, a higher rate of dealers would appreciate the support from European authorities (10,7%); 17,3%, respectively, when focusing on the European sample. Support from banks needs 8,8% of respondents, and only 2,9% of them would prefer another institution would help them. 

Equipment rental companies

Almost 30% (29,2%) of equipment rental companies representatives agreed they did not need any support from institutions. When focusing on the remaining responses, 20% expected support from OEMs, 18,9% of respondents from banks,  and 16,9% of the respondents from national authorities. Only 6,9% of equipment rental companies representatives would need support from European authorities. The remaining respondents (9,2%) claimed they need help from someone another. We explored the results for the european sample separately too, to see whether the preferences for support from european authorities would climb. It reached 12%.

When comparing the results across all four groups of respondents, we see some variability in the preferences of institutional support among fields of business. Therefore, we were curious about the generalizability of the results, which would help us confirm or refuse the assumption that various fields of business representatives should undergo different interventions. The results of our analyses favor the assumption that (together with the analyzes from the previous question) machine owners, contractors, dealers, and equipment rental companies need and should get specific and fitting interventions to face the demands of the crisis (p < 0,001). 

Would you like to know more about the impact of COVID pandemic on the construction industry? Click here for the full report by LECTURA, ERA and CECE!

or continue reading the Covid Special ==> Part 1: The case study on German and British machine owners: similarities and differences in the coronavirus crisis management

==> Part 2: Differences between the coronavirus crisis impact according to the company size

==> Part 3: Why did some contractors suffer from the decrease during the coronavirus crisis, and others experienced the growth of their business?