The quarantine caused by the coronavirus strikes several business items in the economy. Which are the most affected and how much can they fall
The pandemic of coronavirus it not only strikes the world population from a health point of view. Its consequences generate a series of disorders that are reflected in the economy, because the quarantine compulsory makes it impossible for work various business considered “non-essential”.
A fact that causes them to be seriously affected, and even close their Blinds, various ventures of different items they cannot cope with Payments of the numerous expenses fixed, how rental, taxes and wages.
Sure, not all business they are beaten in the same way. Certain sectors face a situation limitlike having to maintain a large structure commercial while their income they are practically “zero” by quarantine. A combo that can be irreparable.
In general, among the business plus beaten by quarantine they are items linked to spreading and transit of the persons, how tourism, gastronomy, hospitality, transport and services social.
As for the numbers, like first data It is important to highlight that all the economy faces a decline notorious of the exercise.
“The Government has given absolute priority to health over the economy, which is seen in the rapid response to the pandemic, the hardness and extension of the quarantine and a slower abandonment than expected for restrictions. It is also seen in emergencies short term over the sustainability medium “, summarizes iProfessional Elizabeth Bacigalupo, economist of the ABECEB consultant.
Following these decisions policies, the full expert who have been “revising our baseline scenario downwards over the weeks, and now our new forecasts point to a fall of the GDP around 6% in 2020, versus a projection prior to the beginning of April of -3.6% and -2.2% less than a month ago “.
Cities are empty of people due to the coronavirus and businesses do not generate income
Most hit businesses
As for the business plus beaten by quarantine, those that register practically zero income and they have a structure relevant to maintain.
In other words, the sectors that the government considered as non-essential or as highly dangerous by concentrations of persons causing.
“There enter the shows sports, he cinema and the theater, the restaurants and pubs, the places danceable, entertainments all types, shopping centers, among others. In those cases, the local is it so closed and there is not billing. The problem in this is the drop or disappearance of the demand“, he says iProfessional Manuel Solanet, Director of Public Policies at the Freedom and Progress Foundation.
And complete: “The tourism, the Business aerial and the transport of people is also dramatically affected. The reason is border closure and the quarantine itself that prevents people from moving, or if it does, is in a restricted way to fulfill an allowed task “.
In the same tune, for ABC a widespread decline is expected in the vast majority of sectors, although the most affected, those that would show double-digit falls, are those associated with tourism and transport, with a retraction expected so far of the order of 17% in the year.
To them are added the hotels and restaurants (-16%), social and personal services (-14%) and building (-eleven%).
Then, according to ABC, the Commerce and the industry at the aggregate level, they would show falls of around 8% per year in their base scenario, “although with heterogeneity inside. “
This is due, for example, to the fact that the dynamism of the Commerce electronic It jumped almost 80% and in some areas helps to compensate for the loss of sales by channels face-to-face.
Refering to industry it should be noted that the elaboration of supplies intermediate “it will also suffer affected by the problems faced by customers”, for example, the chain of furniture (due to the construction situation) and metal mechanics, due to the expected drop in both investment oil and how automotive production.
“Another sector to monitor closely is the textile, What is it job intensive and with high informality and whose demand will remain very depressed, “he says Bacigalupo.
These are the businesses that have fallen the most since the quarantine of the coronavirus
Hotels and gastronomy, among the hardest hit
Among the national items hardest hit by the crisis sanitary of the coronavirus, are the Hotels and restaurants.
According to data from the Gastronomic Hotel Business Federation of the Argentine Republic (FEHGRA), a total of 50,000 Business hotel and gastronomic employing some 500 thousand people and facing the impossibility of paying wages and services.
“We know that many of those companies will not be able to survive this crisis, which will cause the closure of thousands of SMEs of the sector, with the consequent disappearance of sources of employment for Argentines “, summarizes Graciela Fresno, President of FEHGRA, which estimates a projected annual turnover loss of US $ 28.5 billion and a drop in activity of more than 45%.
“Most establishments hoteliers and gastronomic depend largely on tourism internal and of the 7 million tourists international, which will not recover in a long time, so that the improvement in the activity of our sector, unlike others, will not be seen during this year, “he concludes. ash tree.
In general, there are few sectors they can reconvert in the middle of the quarantine. Many Business and items widespread cannot endure the current situation and have cut wages and employeeswhile others border the bankruptcy and they cannot stand up under these conditions.
On the other hand, Solanet remarks to iProfessional all those who perform tasks are affected independent, Like the self-employed. For example, quote the professionals (excluding those of the Health), the trades and the informal sectors.
“By extension, the affectation reaches little Business and shops. Although they had demand for their products and services, it would not be possible for them to produce or sell them “, summarizes the expert.
And it ends: “They are hurting all industries and the services, with the exception of food and pharmaceuticals and those that provide supplies and services. For example, the banking activity it was erroneously considered non-essential and not only was it harmed, but also its closure created enormous difficulties for others. Construction is greatly affected by not having the labor force. “
In this regard, since ABC indicate that the few exceptions will go through the Health and the communications, which “could show a slight rise in activity this year”. To these are added the administration public, he agro and some segments associated with the production of foods.
Many companies are not invoicing and that puts them at serious risk for their continuity
Economy hits business
According to Bacigalupo, this base scenario has an implicit fall of GDP 3.8% in the first quarter, and a drop of almost 15% in both the second quarter and the second half.
But the data is not so encouraging for what follows, as a decline of 3.2% is expected for the third quarter and -1.6% in the fourth, “assuming that the strict quarantine ends on April 26 and the exit after it is very gradual and slow, extending until the end of July “.
In the event that isolation is further extended, the most negative alternative scenario of ABC indicates that the duration of the “hard quarantine“can be extended until May 8, with a flexibilization subsequent slow of an additional 3.5 months in duration.
In other words, the brake could be extended until the end of August approximately. Something that results in a drop in GDP of 8.5% per year.
These different scenarios change the forecasts that the different business items and their sales.
Business for business: the different post-coronavirus activity decline scenarios
Challenge for business in 2020
The challenge for what comes next will depend, according to the experts, of the time in which it takes to dissipate the pandemic of coronavirus.
“All the scenarios they assume that in 2020 does not fully return to pre-coronavirus economic normality in all of the sectors“, relates Bacigalupo.
For Lorenzo Sigaut Gravina, partner and director of Echolatin, taking into account the direct impact of the quarantine and the different speeds of Recovery, “When the confinement is lifted, we can detect the sectors hardest hit by the negative shock of the coronavirus. These include: tourism, social recreation services, construction, commerce; and real estate, business and rental activities”.
Instead, this expert tells iProfessional that the activities primary would be “the less affectedexcept mines and quarries that product of the collapse of the raw paralyzed the sector, along with some branches industrial that produce essential goods like food, crushing of soy, among other. Also services that do not depend on physical presence, “he concludes.
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