Spreading rapidly around the globe, the COVID-19 pandemic has had dire consequences on the South African economy. Such is the impact of the pandemic, four in 10 businesses feel they cannot continue to operate.
This follows a rapid response survey, conducted by Stats SA during the lockdown. Statistics South Africa (Stats SA) asked businesses how the current situation is affecting their daily operations. The survey focuses on the two-week period from March 30 to April 13.
The business impact study is administered through a basic survey focusing on financial performance related to the trading status, business impact, turnover, import and export of goods, purchases, price changes, financial burden and assistance, business survival, and workforce.
The results include the aggregated responses from businesses based on a series of questions. A total of 707 businesses in the formal sector responded to the survey.
According to the report, five in six businesses surveyed experienced a drop in turnover over the reference period. 85,4% of businesses surveyed reported turnover below the normal range. Respondents in the construction, real estate and other business services, and transport industries were the most affected by lower than expected turnover.
The report further shows that 42,2% of respondents indicated that they are not confident that they have the financial resources to continue operating through the COVID-19 outbreak.
When asked how long business can continue without turnover, 54,0% of respondents indicated that can survive without turnover between 1 to 3 months.
Key results in the survey show the following findings:
- 46,4% indicated temporary closure or paused trading activity.
- 50,4% expected their workforce size to stay the same in the two weeks after the survey. However, 36,8% reported their workforce size is expected to decrease.
- 28,3% indicated that their workforce has decreased working hours. A further 19,6% reported laying off of staff in the short term.
- 19,1% indicated that prices of materials, goods or services purchased increased more than normal.
- Access to financial resources: 23,8% indicated a decrease while 52,6% indicated access to financial resources remained the same.
- 38,2% of businesses applying for financial assistance reported they would use government relief schemes.
- 30,6% indicated they can survive less than a month without any turnover. A further 54,0% claim they can survive between 1 and 3 months.
- 46,3% of the workforce were able to meet business demands, and 43,0% of the workforce was not able to meet business demands (the rest reported ‘unsure’).
Stats SA emphasises it is important to remember, when interpreting the results from its survey: micro businesses (with an annual turnover below R2 million) were not included. Furthermore, answers to the survey questions reflect the perceptions of respondents, and the findings are based on limited responses.
The strength of the data is that it provides a quick snapshot and valuable economic insight – in close to real time – into the impact of the COVID-19 pandemic on South African businesses.
The full business survey can be read here – Business Impact Survey of the COVID-19 pandemic in South Africa.