ECONOMY

One in four companies say they may have shut down for good

one-in-four-companies-say-they-may-have-shut-down-for-good

About one in four enterprises (23%) is contemplating the possibility of not reopening after the coronavirus restrictions are lifted, with the rate rising significantly in the sectors of food service (41.7%) and retail commerce (34%). This is according to a survey by Opinion Poll for the Athens Professional Chamber (EEA) on December 14-18 on a sample of 1,002 chamber members.

Even if they do not decide to shut down for good, a large section of enterprises say they will resort to layoffs: Almost a quarter of companies (24%) say this is a likely or very likely prospect, rising to 49.5% of enterprises in food service. In commerce, the sector that accounts for the highest share of employment in Greece, the rate comes to 22.7%.

The survey has found that the rate of intended layoffs is much higher among enterprises employing more than five people. Therefore 39.8% of companies with six to 10 workers intend to lay off staff, with the rate rising to 41.6% among those with 11-20 people and coming to 40.4% among enterprises with over 20 employees.

If these intentions turn into action after the lockdown, they will send unemployment soaring. They stem from the high degree of pessimism among businesses, especially after the start of the second lockdown. One in four companies believe the economic crisis due to the pandemic will last more than two years, and another 27% think it will take a couple of years before normality returns. Some 34% of corporations expect the crisis to last another year and only 11% are more optimistic, saying the crisis will be over in some six months.

“According to our own estimates, one in three enterprises may have opened for the last time and never reopen,” Giorgos Kavvathas, president of the Hellenic Confederation of Professionals, Craftsmen and Merchants (GSEVEE), told Kathimerini. He added that the food service sector he also heads mostly considers that next year will be lost too, as unlike in the financial crisis of the 2010s, tourism will not come to the rescue.