A series of polls conducted by Stats SA shows how lockdown has impacted private business in South Africa, forcing redundancies and company closures.
The purpose of surveys is to provide close to real-time economic insight into the impact of the Covid-19 pandemic on VAT-registered businesses.
The third round of questions solicited responses from 1,079 businesses, covering the period 1 to 30 May 2020.
Unsurprisingly majority of responding businesses (84.3%) reported that business turnover was below the normal range, while 20.2% indicated temporary closure or paused trading activity.
Around half said they continued to trade partially during level 4, while a quarter (25.8%) reported the laying off of staff in the short term. A similar number of respondents (26.8%) said they expected their workforce size to decrease during the level 3 lockdown period.
In terms of employment, 36% of firms indicated that they had laid off staff in the short term under Level 5, reducing to 26% under Level 4.
Worryingly, 36% of businesses indicated that they are not confident that their business has the financial resources to continue operating throughout the Covid-19 pandemic.
Adequacy of financial resources to continue operating throughout the pandemic
Business survival without any turnover
Each of the three surveys asked respondents what they expected regarding the size of their workforce in the period immediately following the survey period, compared with the survey period.
Half of the respondents in the third survey expected to their workforce size to stay the same in level 3 compared with level 4, up from the corresponding proportion of 38.7% in the second survey.
In the third survey 26.8% expected their workforce size to decrease, down from 45.6% in the second survey. Businesses with employees between 10 and 49 reported the highest number expecting a decrease in workforce.
Expected workforce size changes during the following lockdown period compared with the the survey lockdown period
Workforce measures implemented
Many companies took steps to mitigate and reduce the impact of the Covid-19 pandemic on operations. In terms of the number of businesses, the top three measures were ‘increased use of virtual connections internally’, ‘increased use of virtual connections externally’ and ‘added new ways to interact with or sell to customers’.
Business adaption to the level 4 lockdown period