76% of SA's businesses have lost revenue because of Covid-19: survey
The Covid-19 pandemic has wreaked havoc on many local businesses, with 76% reporting revenue losses since March this year and many forced to change their business models.
This was revealed in a national survey on the business impact of the pandemic conducted by a specialist management consultancy firm Redflank.
The report shows 76% of the companies surveyed had seen their revenues shrink, and 23% have shut down, either temporarily or permanently.
Only 2% of the companies reported growth, and 56% reported they were working under reduced capacity, said Redflank.
The survey was conducted among almost 2,000 companies.
Among the most affected sectors were accommodation and food services outlets at 93%, construction at 89% , arts, entertainment and recreation at 87%, service providers such as hairdressers and beauty salons at 86%, wholesale and retail at 83%, and travel support services companies such as car hire ventures and travel agencies at 81%.
“Reassuringly, 83% of businesses that have closed expect to open again at some point. Only 4% of all companies we received feedback from will remain closed. Most of these companies operate in the beauty, hospitality, food and agriculture sector,” said Redflank director Lings Naidoo.
In terms of retrenchments as a result of Covid-19, accommodation and food services companies top the list.
“In these sectors, 68% of respondents had to let all, most or some employees go, followed by hair and beauty salons (62%), construction firms (61%) and entertainment, arts and recreation players (57%),” said Naidoo.
The survey revealed that many companies had opted for employees to work remotely, and this could become a permanent set-up. These include financial and professional services industries, real estate and the media, information, communications, and technology sectors.
“Interestingly, 44% of these companies said this could become a permanent set-up. It’s evident the Covid-19 pandemic has accelerated the remote working trend, which is quickly evolving into a new way of life” Naidoo said.
However, not all industries can move in this direction, including agriculture, construction, travel and tourism.
“Only 30% of respondents falling into these categories said they have more than 20% of their staff working from home. They also suffered retrenchments, revenue losses and cash flow declines.”
Naidoo said 36% of companies said they are reworking their business strategies to overcome the effects of the pandemic. Others are working on enhancing their internal skills set, according to Redflank.
“The assets organisations view as most critical to help recovery include enhanced customer services (64%), improved financial operations (56%), marketing and sales (46%), people management (45%) and planning (44%).”
He said 20% of companies reported that they expected the economy to recover from the pandemic in a year.
“Companies in the legal, accounting, finance and education sectors are most negative about the future,”said Naidoo.
“Participants in mining, electricity, air-conditioning, water and waste water are the most optimistic.”
Other key findings of the report were:
- 4% of businesses closed permanently;
- 19% of businesses closed temporarily, and 83% of these expect to reopen;
- 20% of businesses are operating as usual
- 51% of businesses reported 20% or more staff members working from home. Financial services companies top the list at 84%;
- 56% of businesses are operating below capacity;
- 68% of accommodation and food services companies have had to retrench staff members, and 39% expect more retrenchments;
- 76% of businesses have seen their revenues drop. Accommodation and foods services companies top the list at 93%.