Sri Lanka exporters find new business in Coronavirus, but need cash, digital customs: Survey
ECONOMYNEXT – Sri Lanka exporters have developed new business amid a Coronavirus crisis but they need cash, some tax relief and digital customs and clearing, amid fears of a 40 percent fall in revenues in 2020, a survey has found.
In a survey by the Ceylon Chamber of Commerce survey of goods and services exporters showed that 63 percent of firms reported significant disruption in overall business operations, 58 percent cashflow, 56 percent decline in worker productivity, 47 percent issues with changes in strategy and 45 percent a drop in demand.
Over 50 percent exporters expected a 40 percent drop in exports while 14 percent expected a drop of between 40 to 60 percent.
“On the outlook for export business, nearly half of the businesses expect a ‘severe’ or ‘moderate’ contraction in export business over the next three months,” the Ceylon Chamber said.
Over a 12-month period 36 percent expect high or moderate growth.
“On the outlook for the overall economy, businesses are less optimistic, with 83 percent perceiving severe or moderate contraction over the next three months and only 21 percent percent expecting high or moderate growth over a 12-month period,” the chamber said.
While 53 percent said there was no change in export destinations, 4 percent reported a significant change.
Around 63 percent of firms have identified new business opportunities as a result of Coronavirus.
About 67 percent of large firms, 58 percent of SME firms and 60 percent of women owned businesses reported new business.
But businesses were looking to get debt moratorium, tax relief and digital customs and clearing.
“The top three requests across the types of firm surveyed were for tax relief, financial assistance and digitisation of Government border agencies,” the Chamber said.
Over the next three months, 26 percent of businesses anticipate a decline in full-time employees, 57 percent expect a decline in part-time employees, and 51 percent expected a decline in contractual employees.
Over the next three months 83 percent of firms expects to pay at least the basic salary for employees in worker grade, and 78 percent of the firms expects to pay the basic salary of executives.
The survey shows 2 percent of firms have no financial ability to pay salary for the employees and 1 percent cannot pay salary for the executive grade employees.
About 29 percent of firms were satisfied with the government provided facilities, while 34 percent holds a neutral stance and 38 percent of the export businesses were dissatisfied.
Fully 61 percent of firms have applied or expects to apply for financial relief. Of this 57 percent were large firms, 66 percent were SMEs and 80 percent were women owned businesses.
About 73 percent of firms have applied for financial reliefs from the commercial banks made p of 71 percent of large firms, 76 percent of SMEs and 78 percent of women owned businesses.
In the survey 81 percent of businesses said 60 percent of their total staff worked remotely due to disruptions form the COVID-19, this includes 88 percent in large firms, 73 percent in SMEs and 70 percent in women owned businesses.
Meanwhile 65 percent of firms expects to reduce the training and support for employees’ budget in the upcoming months due to the pandemic.
This includes 70 percent of large firms, 56 percent of SMEs and 80 percent of women owned businesses. (Colombo/June1 – Update II)