Research by Statistics South Africa (StatsSA) has laid bare the devastating impact the COVID-19 lockdown is having on businesses.
The stats agency surveyed 700 businesses regarded as not providing essential services and asked them how the current crisis affected their operations in the two-week period from 30 March to 13 April 2020.
The study didn’t include businesses with a turnover of less than R2 million.
The study found that 85,4% of the businesses surveyed reported turnover below the normal range.
Results from the survey also indicate that 50,4% of businesses expected their workforce size to stay the same, while 36,8% reported that their workforce size is expected to decrease, 12,4% were not sure, and 0,4% expected their workforce size to increase.
The industries reporting the highest percentages of temporary closure or paused trading activity were construction, manufacturing, trade and mining.
Fifty-four percent of businesses said they can only survive up to three months without turnover, while 42,2% of respondents indicated that they are not confident that they have the financial resources to continue operating through the COVID-19 outbreak.
StatsSA said in a statement the full impact of the COVID-19 pandemic on employment will be determined over time as employment tends to be a lagging economic indicator.
“Most businesses (65,0%) anticipate that the COVID-19 pandemic will impact their business substantially worse than the 2008/09 global financial crisis. Only 4,3% of respondents indicated that the impact will be the same.”
Seraj Toefy, lecturer of Entrepreneurship at the University of Stellenbosch Business School, said the devastation of the lockdown will be felt for months to come, as many people are putting themselves into further debt just to survive this period.
“The statistics (StatsSA data) paint a grave picture to the extent to which COVID-19 is affecting businesses, and while it is comprehensive, it still doesn’t paint the severity of the overall situation,” Toefy said.
“In South Africa, we have a huge workforce that is paid weekly and is most likely without income while the company they work for still hangs on to survive. For many companies that will try their best to stay alive during this period, they are having to shed their weekly workforce and short pay their full-time workforce.”
