Here’s how many small South African businesses say they will close in the next 12 months: survey

Business organisation Sakeliga has published a new report looking at how South African companies are coping with the coronavirus lockdown.

423 respondents participated in the survey which took place from 5 – 9 June as the country moved to level 3 of its Covid-19 regulations.

Businesses with fewer than 50 employees accounted for 96% of respondents, while approximately 75% of the respondents indicated ten or fewer employees in their companies.

The data shows that in June nearly eight in ten (77%) of respondents indicated that their company was allowed to trade. By comparison only five in ten of respondents said that they could trade in May’s survey.

However, nearly 17% of respondents still indicated that their company was not allowed to trade in June, while 6.4% of respondents said they were unsure.

Slightly more than two out of every ten participants indicated that their company was operating at full capacity at the beginning of June.

About five out of ten indicated that their businesses were trading with limited operations, while about 16% of respondents indicated that their company wasn’t operating because it didn’t make financial sense to open.

Closures

Nearly 5% of the respondents (about 19 out of 423 respondents) indicated that their businesses would be closing down in the next 12 months.

44% of respondents said they were unsure about closures in the next 12 months, while 52% said their company would remain in business.

Of the 19 respondents who indicated a closure in the next twelve months, 15 (in total) stated the regulatory response to Covid-19 as a reason for the upcoming closure.

Only two gave the medical impact of Covid-19 as a reason. A further two of those 19 respondents indicated other factors not related to Covid-19 as the reason for the closure.

In June, 14,2% of respondents believed that the damage due to Covid-19 would eventually be offset (a slight proportionate improvement from the 10.3% of respondents in May).

Almost 40% of respondents in June indicated that little could be done to limit the damage (improved from 47.6% in May), while 33% indicated the damage would be offset to a limited extent (an increase from 25.5% in May).

“Although a large majority of respondents accordingly still expect lasting damage to businesses, on the face of it we are once again seeing a possible slightly better picture in June compared to the picture in May and April,” Sakeliga said.

“Yet the feedback still paints a bleak picture that considerable damage has been done and will have to be dealt with by the relevant businesses.”


Read: South African startups share their lockdown experiences: some are winning – for others, it’s a struggle

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Here’s how many small South African businesses say they will close in the next 12 months: survey