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Managers of SMEs expect 50pct reduction in activity or even closure

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IMM

Small and medium-sized enterprises (SMEs) will be the most affected by the coronavirus pandemic, and their managers estimated as the main risk reducing the activity by more than 50pct or even closing it, the National Institute of Statistics (INS) reports on Wednesday after a survey into the evolution of the economic activity.

"In order to measure the impact of SARS-Cov.2, the INS carried out an ad-hoc survey between March 17 and 19, 2020 regarding the estimation of the activity evolution and the number of employees for the periods 17/19 - March 31 and 1 - April 30, 2020. The managers of the companies were asked about the perception regarding the evolution of the economic activity, namely if they consider that the activity will be reduced by up to 25pct, between 25-50pct, over 50pct or it will close, but also if the activity will not shrink or could increase. Given the uncertainty of the evolution of SARS-Cov.2, managers have had the opportunity to opt for the 'I can't estimate' answer version," an INS release reads.

From the analysis of the answers, one in five managers mentioned that by the end of March activity could decrease by to 25pct. Three quarters of the managers who mentioned that the activity will increase are from the retail sector.

Regarding the evolution of the activity in April 2020, the degree of uncertainty increases, so over 48pct of the respondents mentioned that they cannot estimate how the economic activity will evolve. The share of managers who estimated that the activity will not be reduced in April reduced by half from the value of March.

In the industry, about one third of the respondents who mentioned that the activity will be reduced in April, estimated that the activity could be reduced between 25pct and 50pct.

According to the INS, the most affected will be the small and medium-sized enterprises whose managers estimated as the main risk the reduction by over 50pct or even the closure of the activity.

As to the estimate of the evolution of the number of employees until the end of March, almost a quarter of the managers mentioned that they cannot estimate how it will evolve. The largest decreases are estimated to be in the services sector.

The uncertainty for April increases, so the share of managers who mentioned that they cannot estimate the evolution of the number of employees was 43pct of the total respondents.

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