What businesses were hit harder by the quarantine

Photo Manuel Solanet
Manuel Solanet

The coronavirus pandemic not only hits the world’s population from a health point of view. Its consequences create a series of disruptions that are reflected in the economy because mandatory quarantine makes it impossible for various businesses considered “non-essential” to work.

A fact that causes them to be seriously affected, and even close their blinds,several ventures of different items that cannot afford the payments of the numerous fixed expenses, fijossuch as rent, taxes and wages.

Of course, not all businesses are hit in the same way. Certain sectors face a limitsituation, such as having to maintain a large business structure while their income is practically“zero”by quarantine. A combo that can be irretrievable.

In general, among the businesses most hit by quarantine are areas linked to the recreation and transit of people,such as tourism, gastronomy, hospitality, transport and social services.

As for the numbers, as a first fact it is important to highlight that the whole economy faces a noticeable decline in activity.

“The Government has given absolute priority to health over the economy, which is visualized in the rapid response to the pandemic, the harshness and extent of quarantine and a slower-than-expected abandonment of restrictions. It is also seen in short-term emergencies over medium sustainability,” sums up iProfessional Elizabeth Bacigalupo,economist at the consulting firm ABECEB.

As a result of these political decisions policies,the full expert who have been “reviewing downwards our base scenario over the course of the weeks, and now our new forecasts point to a fall in the GDP around 6 in 2020, versus a pre-screening in early April of -3.6 and -2.2 less than a month ago.”

Cities are empty of people and businesses don't generate revenue

Cities are empty of people by the coronavirus and businesses don’t generate revenue

Most hit businesses

As for the businesses most hit by quarantine, it stands out those that record virtually zero revenue and have a relevant structure to maintain.

In other words, the sectors that the Government considered to be non-essential or highly dangerous are being very affected by the concentrations of people they provoke.

“There are sports shows, cinema and theater, restaurants and bars, dance venues, entertainment of all kinds, shopping centers, among others. In such cases, the premises are closed and there is no billing. The problem with this is the fall or disappearance of the lawsuit,” Manuel Solanet, Director of Public Policy at the Freedom and Progress Foundation, tells iProfessional.

And complete: “Tourism, empresas airlines and people transport are also dramatically affected. The reason is the closure of borders and the quarantine itself that prevents people from moving, or if it does is restricted to fulfill an allowed task.”

In the same vein, for ABECEB a generalized decline is expected in the vast majority of sectors,although the most beaten, those that would show double-digit falls, are those associated with tourism and transport,with a retraction expected until the order of 17 in the year.

They are joined by hotels and restaurants (-16), social and personal services (-14) and construction (-11).

Then, according to ABECEB, trade and industry at the aggregate level would show falls around 8 per year in its base scenario, “albeit quite heterogeneity within it”.

This is due, for example, to the highlighting of the dynamism of e-commerce electrónico that jumped almost 80 and in some areas helps to compensate for the loss of sales through face-to-face channels.

As for the it is worth noting that elaboration of intermediate inputs intermedios “will also suffer from the problems faced by customers,for example, the chain of furniture (because of the construction situation) and the metalworking,by the expected fall of both the inversión oil and as a result of oil investment automotive production.

“Anothersector to monitor closely is textiles,which is intensive employment and with high informality and whose demand will remain very depressed,” says Bacigalupo.

These are the businesses that are most collapsed from quarantine by the coronavirus

These are the businesses that are most collapsed from quarantine by the coronavirus

Hotels and gastronomy, among the most beaten

Among the national items most hit by the coronavirus health crisis are hotels and restaurants. You may be interested in

According to data from the Gastronomic Hotel Business Federation of the Argentine Republic (FEHGRA), a total of 50,000 hotel and gastronomic companies employing about 500 thousand people and facing the impossibility of paying wages and services. empresas

“We know that many of these companies will not be able to survive this crisis,which will lead to the closure of thousands of SMEs in the sector, with the consequent disappearance of sources of employment for Argentines,” he sums up Graciela Fresno,president of FEHGRA,which estimates a projected annual turnover loss of $28.5 billion and a drop in activity of more than 45.

“Most establishments hoteliers and to largely depend on the turismo tourism and the 7 million international tourists, who will not recover in a long time, so the improvement of the activity of our sector, unlike others, will not be seen during this year”, concludes Fresno.

In general, there are few sectors that can be converted into the middle of quarantine. Many companies and generalized items cannot withstand the current situation and have cut wages and employees, empleadoswhile others border bankruptcy and cannot stand under these conditions.

On the other hand, Solanet points out to iProfessional that all those who perform independent tasks, such as accountproprosies, are affected. For example, it cites professionals (excluding health professionals), trades and informal sectors.

“By extension, the affectation reaches small businesses empresas and businesses. Even if they were in demand for their products and services,they would not be able to produce or sell them,” the expert summarizes.

It concludes: “All industries and servicesare being harmed, with the exception of food and pharmaceutical industries and those that provide them with inputs and services. For example, banking was mistakenly considered not essential and was not only damaged, but also closed, created enormous difficulties for others. Construction is greatly affected by not having the labour.”

In this regard, ABECEB indicates that the few exceptions will go through health and communications,which “could show a slight rise of activity this year”. Added to this are the public administration, the agro and some segments of associated food production.

Many companies are not billing and that puts them at serious risk to their continuity

Many companies are not billing and that puts them at serious risk to their continuity

By Mariano Jaimovich – IProfessional

With opinions from Manuel Solanet