Belgium’s ports were largely shielded from the worst economic impacts of the pandemic in 2020 thanks to government support measures, according to a new economic impact study from the National Bank of Belgium (NBB).
While Belgian ports didn’t escape wholly unscathed – supply and demand shocks still had a negative impact of -1.2% on direct value added – direct employment remained stable and some weak performing port companies even boosted profitability.
“During the pandemic, it was difficult to scale costs down in line with falling sales at such short notice because of high fixed costs, so the profitability level of the average port company declined in 2020,” the NBB said in a statement.
“However, while strong-performing port companies in terms of operating result experienced a drop in profitability, weaker businesses enhanced theirs thanks to the generous government support measures.”
Policy actions kept number of port company failures ‘very low’
NBB says that direct and indirect support for wage payments, among other things, helped port companies maintain or even slightly strengthen their liquidity position, while shoring up their solvency.
“Observations indicate that the policy actions taken to keep businesses afloat had a particular focus on companies that were viable prior to the pandemic,” they said.
“Although Belgian ports were impacted by the Covid-19 pandemic, various temporary government support measures and moratoria on insolvencies prevented companies from going bankrupt.”
Investment has also gone up despite the pandemic and its supply-chain disruptions, rising by 5.1% to € 5.1 billion in 2020, due to higher investment levels in the chemicals industry and cargo handling.
“Those investment decisions had already been taken before the COVID-19 outbreak and were followed up as those branches were not substantially impaired by the crisis,” NBB noted.