Half of private sector may not survive COVID-19 crisis

Smaller companies most pessimistic

Over 22 percent of the smaller companies (5 to 20 employees) foresee bankruptcy of the company in its present form if the crisis lasts longer than two months. Should the crisis last longer than six months, 56 percent of the smaller-sized businesses fear for their survival. Larger companies (50 employees or more) expect to be at a lower risk.

Worst outlook in the accommodation and food services sector

There are fears about business continuity across the sectors. At the beginning of April, the most pessimistic outlook was seen in the accommodation and food services sector. Nearly 36 percent believe they can sustain two months of crisis at the most, while 33 percent give themselves three to six months maximum. Only 5 percent say they are able to survive a crisis lasting more than twelve months. If the crisis should last longer thans six months, doubt prevails among a majority of entrepreneurs in the automotive and motorcycle industry, the construction sector and the culture, sport and recreation sector. Entrepreneurs in real estate renting and trade are least concerned about business continuity in the coronavirus crisis: only 4 percent believe they may survive no more than two months. In retail trade, half of all entrepreneurs are unable to estimate their chance of survival.

Three-quarters expect turnover decrease

Around 75 percent of entrepreneurs expect their turnover to decline in Q2 while nearly 44 percent expect this decline to exceed 20 percent. Only 6 percent of all entrepreneurs expect turnover to increase. Those entrepreneurs who foresee turnover increase are mainly found in retail trade (27 percent) and transport and storage (8 percent). Aside from lower turnover, a large majority expect a decrease in staff over the second quarter of this year. Almost one-quarter of businesses expect they will have to reduce staff numbers by more than 20 percent as a result of the coronavirus crisis.
At the beginning of April, turnover decline was expected by over 90 percent of entrepreneurs in accommodation and food services, automotive and motorcycle trade, and culture, sport and recreation on account of COVID-19. The vast majority of businesses expect a decline in turnover of more than 20 percent. Anticipated job loss for Q2 is highest in accommodation and food services with 85 percent facing downsizing; nearly 60 percent of this group expect this downsizing to exceed 20 percent. In automotive and motorcycle trade, and in culture, sport and recreation, over 60 percent of entrepreneurs anticipate staff reductions.

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