Business continue to face financial impacts of COVID-19: SICCI Survey
Businesses continue to face the financial impacts of the COVID-19 global pandemic, according to a latest survey conducted by the Solomon Islands Chamber of Commerce and Industry (SICCI).
A total of sixty-four (64) businesses, a majority of them being Small and Medium Enterprises (SMEs), participated in the survey which closed on 26 June 2020.
This is the second survey the Chamber has conducted on its members and the wider business community in its efforts to identify key challenges faced by businesses as a result of COVID-19 considering the important role that businesses play in creating jobs, in long-lasting economic growth, development and prosperity.
Ninety-seven percent (97%) of respondents reported COVID-19 having a financial impact on their business with forty-seven percent (47%) reported high financial impact.
Further, twenty-six percent (26%) do not have access to any funding to manage this impact.
The survey also reported that financial aid such as interest-free loans, rent/loan/tax holiday remains the main business need during this time.
Although most (77%) did not experience any increase in council rates charged to their business, twenty-three percent (23%) did report an increase while one respondent noted an increase of up to seventy percent (70%).
The survey noted that the Government’s Economic Stimulus Package (ESP) is offering some relief for struggling businesses.
The ESP’s Soft Measures, a $25 million allocation for tariff reduction, rental relief and loan repayment relief, is identified to be the most helpful by forty percent (40%) of respondents.
“Immediate recovery measures ($70 million) is identified as second most helpful at twenty-seven percent. The medium to long-term support for growth stimulation ($90 million) is the third most helpful at twenty-three percent” the SICCI survey reported.
Over half of the respondents (57%) state that the general situation of their business is the same since the last SICCI survey whereas, thirty-four percent (34%) report that their general business situation had worsened.
Only nine percent (9%) state that the general business situation for their business had improved since the last survey which was conducted in May 2020.
Maintaining customers and cash flow identified as main challenges for businesses
Maintaining customers and cash flow to maintain employees and their operations are the main challenges businesses currently face as a direct result of the COVID-19 global pandemic.
Business and industry also indicate that at least 580 workers have been temporarily laid off.
This was highlighted in a second survey the Solomon Islands Chamber of Commerce and Industry (SICCI) conducted on businesses in its efforts to identify key challenges faced by businesses resulting from the global COVID-19 pandemic although no case has been registered yet domestically.
The survey was conducted with sixty-four (64) businesses and the majority of the responses (47%) were from Small and Medium Enterprises (SMEs) employing less than twenty (20) employees. Surveyed businesses come from all sectors except for Alternative Energy, Automobile Parts, City Councils, Diplomatic Organisations, Industrial Goods and Services, and Security Services.
Twenty-Six (26) percent say their customer and clients base have been affected and demand is lower than normal while twenty-Two (22) percent identified cash flow as the main challenge in maintaining staff and operations is inadequate.
Other challenges identified in the survey included travel restrictions; business partners have been badly affected and are not operating normally; suppliers are unable to provide inputs; difficulty in loan repayments; and workers are absent from work due to illness or Government orders.
Thirty-eight percent (38%) reported laying off a total of 583 workers. Of the total, 327 were males and 204 were females. Other respondents did not specify the number of male and female workers being laid off. The single highest instance of worker temporarily laid-off was 153 workers for one company with the lowest number being one dismissal.
The survey revealed that six percent (6%) of respondents are not operating. A quarter (25%) are operating partially and five percent (5%) are operating fully but remotely.
The survey also asked if businesses feel that they have received adequate Government guidance to inform decisions regarding their workers. Forty-two (42) percent felt that information received is inadequate.
The number of businesses reported to have full insurance has increased from fifty-one percent (51%) in the previous survey to sixty-seven (67%) in this recent survey. Despite the increase in businesses acquiring insurance, thirty-three percent (33%) of businesses still do not have insurance. The survey also found that twenty-five percent (25%) of businesses still do not have a Business Continuity Plan (BCP).
Although improved in general, the responses represent cause for concern as vulnerable companies demonstrate a shallow depth of resilience, which will impede their recovery and ability to capitalize on emerging opportunities.
Survey highlights businesses’ reaction to Shipping quarantine
There have been mixed reactions from businesses who participated in the latest Solomon Islands Chamber of Commerce and Industry (SICCI) survey in regards to shipping quarantine period at the country’s main international port in Honiara.
A total of sixty-four (64) businesses participated in what is the Chamber’s second enterprise survey in response to the COVID-19 global pandemic which closed on 26 June 2020.
Thirty-seven percent (37%) of respondents stated the quarantine period for ships had delayed their cargo. A further twenty-eight percent (28%) stated that the quarantine period has added costs to their business.
The Chamber is involved in the exempting of shipping vessels, as a member of the Shipping Exemption Committee, from mandated quarantine periods which currently depends on the COVID-19 status of their last port of call.
To date, the Chamber has been raising and relaying to the National COVID-19 Oversight Committee the impacts of the travel restrictions currently in place as it affects movement of goods and supplies into the country.
There is a new shipping protocol 3.0 developed under Gazette No. 61 which states how the Oversight Committee, through its Shipping Exemption Committee considers requests for exemptions from mandatory quarantine periods.
In terms of export and import during the State of Public Emergency (SOPE), thirty-three percent (33%) are seeing reduced volume. Only twenty-one percent (21%) are trading the same volume as before.
Twenty-one percent (21%) stated that the order ‘restricting the movement of vessels and aircrafts’ affects their business the most.
The prohibition of entry of non-citizens’ order has affected seventeen percent (17%) of the respondents, and sixteen (16%) indicate that the order to ‘undergo quarantine period of 28 days’ affects their business the most.
Meanwhile fifty-five percent (55%) of respondents disagree about the 28-day quarantine period for people entering the country. Businesses commented that the length is too long and may slow economic recovery.