Belgian companies surveyed by a government expert group have revealed plans to lay off about one in five employees, meaning nearly 200,000 people could stand to lose their job.
The Economic Risk Management Group (ERMG) surveyed a total of 2,675 companies, including self-employed persons, on the impacts the coronavirus lockdown on business.
The survey was carried out on 5 April, coinciding with the beginning of a push to reboot the economy, as some non-essential sectors resumed activities and several shops prepared to reopen on 11 May.
Out of the surveyed companies who had turned to temporary unemployment schemes, one in five said it risked firing personnel after the schemes ended.
Drawing from the National Employment Office’s (ONEM/RVA) estimates that around 900,00 people were currently unemployed, the ERMG said that “approximately 180,000 employees could lose their jobs in the relatively short term.”
“That is almost 6% of the total number of employees in the private sector,” the group wrote.
The results of the survey show that companies are recovering slowly and have taken a 29% drop in turnover in comparison to the period before the pandemic hit, De Morgen reports.
Differences between sectors were also observed, with trade and construction businesses recovering strongly while activities stagnated in sectors such as real estate and IT and communications.
The agricultural sector has also taken some hits as a result to the crisis, with supply chains disrupted due to the closure of restaurants and catering industries.
On Monday, an association of Flemish farmers issued a call for help from the government for pork producers, who were running out of space for their fattened animals as they were unable to send them to the slaughterhouse.
Risk of bankruptcy
The group’s survey revealed that around 7% of all companies indicated that they were likely or very likely to go bankrupt, a share that rose to 28% for arts and entertainment industries.
For the restaurant and hospitality industry, the survey showed that 19% of companies feared becoming bankrupt as a result of the crisis.
In the report, the ERMG said that it could be too early to see the full impact of the progressive easing out of the lockdown at the current moment, with revenue losses expected to decrease in coming weeks.
“It should nevertheless be emphasised that, despite the phased reboot of the economy, recovery may take a long time,” the wrote, adding that, for 60% of companies, the main obstacle to recovery was insufficient demand.
The Brussels Times