Stats SA warns of business closures due to Covid-19 lockdown
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Johannesburg - A survey conducted by Statistics South Africa (Stats SA) has revealed that 42.2% of the country’s businesses have indicated that they have run out of financial resources to continue operating during the Covid-19 outbreak.
The agency had conducted the survey between 30 March to 13 April, the period between the first leg of the Covid-19 lockdown, which had since been extended by another two weeks.
It said during its survey it had talked to 707 businesses in the formal sector such as construction, real estate and transport industries, manufacturing, trade and mining, who indicated that they were mostly affected by lower than expected turnover. The survey had excluded micro businesses with an annual turnover of below R2 million.
“Five in six businesses surveyed experienced a drop in turnover over the reference period, (this means that) 85,4% of businesses surveyed reported turnover below the normal range.
“When asked how long business can continue without turnover, 54,0% of respondents indicated that they can survive without turnover between 1 to 3 months,” the latest report from the Stats SA said.
“Half of the businesses surveyed have temporarily closed their doors while the industries reporting the highest percentages of temporary closure or paused trading activity were construction, manufacturing, trade and mining.”
The report said only one in four businesses had reported that they had not taken any measures.
“Respondents indicated that they have implemented a range of measures to cope with the impact of the pandemic on their workforce, including decreasing working hours and laying off staff in the short term.”
Stats SA’s Dr Sagaren Pillay said the situation had called for policy makers to focus on the implications of the lockdown.
He said the survey did not ask the businesses if they had applied for the Solidarity Fund, which was set up to assist them throughout the lockdown period. The fund had so far received a donation of more than R2 billion.
“On our side, all we did was based on the perception, and we asked questions as to what impact they felt that this lockdown had on them,” said Pillay.