JOHANNESBURG (Reuters) – Hundreds of South African businesses fear they do not have the financial resources to weather the lockdown imposed to curb the spread of the coronavirus, an official survey published on Tuesday showed.
Out of 707 respondents to the survey conducted by the statistics office, 42% said they were not confident they would be able to continue as business is lost during the five-week lockdown that began on March 27. Fifty four percent of respondents indicated they can survive without turnover for between one and three months.
Statistics South Africa’s survey asked businesses how their operations had been affected in the two-week period from March 30 to April 13, and is intended to provide a “quick snapshot… in close to real time” on the impact on affected businesses, StatsSA said.
South Africa’s lockdown is expected to have dire consequences for the continent’s most industrialised economy, which already tipped into recession at the end of last year.
Almost two thirds of businesses felt the impact would be worse than that of the 2008/09 recession caused by the global financial crisis, with 65% believing it would be substantially worse and only 4.3% saying the effect would be the same.
Nearly half of the businesses surveyed had closed their doors for the duration of the lockdown, with the construction, manufacturing, trade and mining industries seeing the highest percentages.
More than 85% reported a drop in turnover, while 36.8% said they expected their workforce would need to be cut as a result of the outbreak. Around 28% and 19% said they had already cut hours or temporarily laid off staff.
(Reporting by Emma Rumney; Editing by Susan Fenton)
