translated from Spanish: More than one million companies closed for COVID; micro, the hardest hit

More than one million companies had to close because of the COVID pandemic and economic problems over the past 17 months, the National Institute of Statistics and Geography (Inegi) reported.
According to the COVID Economic Impact Survey (ECOVID-IE) and the Business Demographics Study (EDN), in the last 17 months, of the 4.9 million establishments (micro, small and medium) that there were, 3.9 million survived, representing 79.19%.
The number of establishments closed so far is 1 million 10 thousand 857, which equate to 20.81% of the total.
On the other hand, Inegi estimates that during the third quarter of 2020, at least 86.6% of one million 873,564 companies in the country had some involvement because of the pandemic.
Read: AMLO highlights the creation of 66,000 jobs in August and says the epidemic ‘is giving way’
However, this figure is almost 7% lower than in the second quarter of the year, when 93.2% of companies reported some impact.
In the same period, the survey estimates that 23.1% of companies “applied temporary closures or technical shutdowns”, so as not to close permanently.
The average time they closed or slowed down activities was 18 days.
Micro-enterprises, the hardest hit
Among the main impacts recorded in companies are: declining revenues (79.2%), low demand (67.6%), shortages of inputs and/or products (22.8%), reduction of staff (16.3%) reduction of remuneration or benefits (11.3%).
By type of enterprises, micro (those with up to 10 workers) and SMEs (small and medium-sized enterprises) have been most affected by the effects of the pandemic.
80.3% of micro-enterprises reported a decrease in revenue, 73.7% of SMEs did the same, and only 11.9% of large enterprises were affected in this area.
Low demand affected 51.9% of micro-enterprises, 47.2% of SMEs and only 13.1% of large enterprises.
In terms of staff reduction, the percentage of involvement in the companies that reported it was 40.5% during the third quarter of 2020 and the percentage of reduction in remuneration or benefits was 46.6%.
Lack of support and late payments
In recent months companies have fallen into crisis not only because of the effects of the pandemic, but also because of the lack of support from the government.
According to Inegi data, 94.1% of companies have not received any tax support or benefits.
The support policies that companies require to overcome this crisis are: tax support, deferment of payments, cash transfers and access to new credits.
Faced with this scenario, the three types of companies (large, SMEs and micro) record in the payment of their debts.
38% of companies with debts are mirco, 34.2% SMEs and 19.3 large companies.
If the economic decline persists and there are no support for businesses, much of SMEs and micro-enterprises could close in the coming months.
46.6% of both groups (micro-enterprises and SMEs) could continue to operate without assistance for an additional 3 to 12 months. While 16.3% of micro and 15.8% of SMEs could only continue to work for three more months.
In view of this picture, companies have taken operational measures to prevent closure.
48.8% started online sales, 33.3% have offered new goods or services and 7.8% have diversified their supply chains.
Both studies are available in full here.
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Original source in Spanish