Four in 10 businesses fear they will not survive outbreak

Four in 10 businesses feel that they cannot continue to operate through the Covid-19 outbreak.

This is one of the findings contained in a rapid response survey conducted by Stats SA on how the Covid-19 outbreak has affected businesses.

Stats SA said on Tuesday that 707 businesses in the formal sector responded to the survey, outlining the pandemic’s impact on turnover, trading, workforce, imports and exports.

The survey found that five out of six businesses reported turnover below the normal range from March 30 to April 13.

“According to the report, 85.4% of businesses surveyed reported turnover below the normal range.

The construction, real estate, “other business services”, and transport industries are the sectors most affected by lower-than-expected turnovers.

The survey showed that 42.2% of the businesses said they were not confident that they had the financial resources to continue operating through the Covid-19 outbreak.

“When asked how long business can continue without turnover, 54% of respondents indicated that they can survive without turnover for one to three months.”

The survey found that almost half of the businesses surveyed have temporarily closed their doors.

The industries reporting the highest percentages of temporary closure or paused trading activity are construction, manufacturing, trade and mining.

Asked how their workforce might change over the two weeks after April 13, 50.4% expect no change, while 36.8% expect their workforce size to decline.

“Businesses indicated that they have implemented a range of measures to cope with the impact of the pandemic on their workforce, including decreasing working hours (28.3% of respondents) and laying off staff in the short term (19.6% of respondents). Only about one in four businesses indicated that they had not taken any measures yet.”

Stats SA said most businesses (65%) expect the Covid-19 pandemic to impact their business substantially worse than the 2008/2009 global financial crisis. Only 4.3% of respondents say the impact will be the same, Stats SA said.

Stats SA said micro businesses, with an annual turnover below R2m, were not included in the survey.

It said results were based on the perceptions of the businesses which responded, and interpretation was based on limited responses.