Alpha Research poll: 79% of firms in Bulgaria report losses because of Covid-19

Written by on May 4, 2020 in Bulgaria - Comments Off on Alpha Research poll: 79% of firms in Bulgaria report losses because of Covid-19

Seventy-nine per cent of businesses, especially micro and small ones, surveyed in an Alpha Research poll reported direct or indirect losses because of the coronavirus crisis, the agency said on May 4.

The survey was done between April 13 and 22 through phone interviews with 500 companies in all sectors of production and services, Alpha Research said.

A total of 21 per cent of businesses said that the crisis had not affected them much, with 3.5 per cent seeing an increased demand for their products and services, and just fewer than two per cent re-orientating themselves to other activities.

About 56.4 per cent reported a contraction in revenue in the range of 20 to 50 per cent or 50 to 90 per cent. Fifteen per cent said that their revenue was down by 100 per cent.

In spite of the shock of the crisis and the downturn in activity and revenue, most companies have made serious efforts to adapt, make organisational changes, or undertake temporary restructuring to retain employees and remain ready to restart soon.

The survey found that 22.6 per cent of companies had retained the same organisation as before the crisis. However, these were mainly medium-sized and large companies.

At about a fifth of the companies polled, some or all employees were working from home.

A significant proportion of companies have already taken one or more actions that directly affect the earnings and job prospects of their employees. About 18.2 per cent had put employees on paid leave and 17 per cent on unpaid leave. At the same time, 17.9 per cent of companies were working part-time.

The fact that a significant portion of the country’s economy remained open and some anti-crisis measures were quickly taken has allowed more than three-quarters of firms not to cut jobs so far, Alpha Research said.

At the same time, though slow, the proportion of those forced to cut jobs has increased – from 17 per cent at the end of March (according to National Statistical Institute data) to 21 per cent in the second 10 days of April, according to the Alpha Research poll.

Just more than 12 per cent of these companies have cut some staff and 9.1 per cent had dismissed them all.

The atttitude to the 60:40 measure – by which the state picks up 60 per cent of payroll costs of firms in certain sectors deemed to be affected by the coronavirus crisis, while the employer must pay the remaining 40 per cent – was polarised, Alpha Research said.

Fifty-nine per cent favoured the measure while 41 per cent were critical, mainly seeking an even greater degree of financial commitment on the part of the state, the agency said.

Companies with a large number of employees in the manufacturing sector which are hoping for a speedy recovery of previous volumes once the European economy is restarted, as well as firms with less direct costs of operations, are most strongly in favor of the 60:40 measure.

It is rated as insufficient by two groups of businesses – those with terminated activities that do not have fresh resources to provide the remaining 40 per cent, and companies with seasonal or irregular employment, which provide workers with lower wages.

Not many companies are aware that these are measures to support people’s employment and income, and they cannot be considered as direct incentives for economic recovery and growth, which are already needed at a second stage, the agency said.

About 62 per cent of businesses polled by Alpha Research had a positive view of the government’s overall – health care, economic, social – response to the coronavirus crisis. Close to two-thirds had a positive view of the government.

More critical than the average were those sectors of the economy hardest-hit by the crisis – tourism, catering, hospitality, but also food producers, processing enterprises, construction and the transport industry.

“An interesting fact of the survey is that the vast majority of companies in Bulgaria (87.7 per cent) are optimistic that they will be able to get out of the crisis and recover,” Alpha Research said.

But 12.3 per cent believed that the blow had been so strong that they were facing bankruptcy.

About 69.5 per cent hope to recover within a year.

Businesses in the tourism, restaurant, small manufacturing, service and cultural sectors have double the average of expectations of catastrophe.

A positive sign was the fact that most of the companies polled had already started planning, or even had taken steps towards reorganisation or innovation, so that they can, on the one hand, go through the crisis more easily and on the other, be more competitive during the recovery period, during which many things from the current way of life and work will not remain the same, Alpha Research said.

Twenty-seven per cent said that the crisis was a chance for them to optimise their workflow, which they would continue to do in the future.

The use of electronic services went up by 22 per cent.

Seventeen per cent will continue to use flexible working hours.

One in five companies plans to launch new products and one in seven companies plans to launch new services. Fourteen per cent plan to work with other companies to achieve greater efficiency.

Every tenth company said that it was re-organising to shift part of its business to a work-from-home basis.

(Photo: ela23/freeimages.com)

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