COVID-19 and Connectivity Report

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A recent report from the Communications Cable and Connectivity Association (CCCA) noted that, as COVID-19 has changed the way we work, educate and communicate, it is alarmingly clear that telecommunications connectivity is not just essential, but critical for the functioning of global society. This aligns closely with BICSI South Pacific’s long-standing contention that businesses – and indeed society – cannot function  without dependable ICT infrastructure.

From telemedicine to commerce to news, awareness, communication, transportation, security, infrastructure and everything in between, connectivity provides the network that enables modern life to go on. This is why now, more than ever, it is vital that the products and services that enable connectivity provide secure, reliable connections between devices and networks.

CCCA noted timely information recently published by the Wire and Cable Manufacturers Alliance (WCMA – collected from Quarterly Conference Calls and conversations with industry executives in the US.

Companies reported relatively healthy activity during January/February, then were significantly impacted during March when the lock-downs were initiated. We need to wait until results are posted for Q2 and Q3 to recognise the full impact of the downturn between April-June.

WCMA reported that the overall status of the industry was inconsistent, as products fit into very specific end-use market supply chains and each of those supply chains have their own dynamics. Market segments most negatively impacted right now are Automotive and Vehicles, Aerospace, Construction, Industrial Automation, Oil & Gas, Retail. Market segments remaining relatively healthy at the moment include Transit, Power Transmission and Distribution, Medical, Military, 5G, Telecommunications and Data Centres.

Comments received from the industry executives were optimistic and focused on the future – to be prepared when demand resumes. Many companies reported that they had already begun taking measures to reduce costs (headcount and non-essential costs) and to improve their cash-flow and liquidity anyway, measures of which have been escalated because of the pandemic. Priority for the remainder of the year is now “cash preservation”. All non-essential travel is predominantly suspended through the remainder of the year, regardless of the resolution timing of the pandemic. Many companies are also taking the approach of using week-long revolving unpaid time off as a way to manage resources to keep people rather than more widespread lay-offs or furloughs during the temporary downturn.

Overall, it was reported that projects were “delayed but not cancelled”. Stated as good news, companies provided a sense of optimism that essential project spending continues, and that pent-up demand should drive projects expeditiously once sequestering is over. Order backlog remained healthy. The pandemic has made the examination of where to source products more acute, taking a risk-management approach into consideration.