RAMALLAH, Preliminary results of a survey on the impact of COVID-19 on business establishments in Palestine, conducted for the Ministry of National Economy (MONE) by Development Alternatives Incorporated (DAI) in cooperation with the Palestinian Central Bureau of Statistics (PCBS), showed that businesses have suffered to various degrees by the Coronavirus pandemic forcing them to take financial and administrative measures, as well as digital solutions, to face the impacts of the pandemic.
The results of the survey of some 2600 establishments, conducted with support from the World Bank, showed that more than two-thirds of the establishments, primarily the services sector in Bethlehem, were closed for about one-and-a-half months during the lockdown period (March 5 – May 31, 2020). At the same time, 63% of establishments suffered from a stoppage in supplies related to production inputs such as raw materials and production requirements. In addition, there was a decline of about half in the production level or the size of sales, where 14% of Palestinian establishments had to let part of their employees go in order to face this crisis.
Final results indicated that 71% of establishments (92% in the West Bank and 27% in Gaza Strip) were closed for many days due to the restriction measures taken by the government enforcing the necessity of closure as a preventative measure for fighting the Coronavirus outbreak.
The percentage of the closure days during the lockdown period was 51% concentrated in services activity, where the percentage of closure days for this activity reached 68% and it reached 54% for the industrial activity. While the percentage of closure days for the activities of transport and trade reached 56% and 42%, respectively. Also, the biggest percentage of closure was centered in Bethlehem Governorate for a period of more than two months.
Most of the establishments reported that sales/production size has decreased during the three months of the lockdown by 93%, with a decline in the average sales/production by 50% compared with a normal situation, where establishments operating in the construction sector recorded the highest decline of the average sales/production by 56%, followed by establishments operating in the services sector with a decline of 56%.
Ministry of National Economy explained that the main reason behind such a decline in the production and sales size at the establishments is linked to the decline of consumption in general, where consumption recorded a decline of more than 5% during the lockdown period.
Furthermore, the pandemic negatively impacted several industries, causing them to stop working, especially tourism and crafts, which were stopped completely, while shoe, leather, clothing/garment businesses were stopped partially.
The results showed that 63% of the establishments reported having difficulties in the supply of inputs, raw materials, or finished goods and purchased materials (69% in the West Bank and 49% in Gaza Strip). Hence, economic activities suffering the most from this difficulty were the construction sector with a percentage of (73%), trade sector at (71%), and industry sector at (69%).
The survey showed that 89% of the establishments are facing a decline in the availability of cash flow, which affected the percentage of returned checks that increased to reach 36% (48% in the West Bank and 10% in Gaza Strip). Also, 59% of the establishments reported having a difficulty in the provision of financial services that are usually available in a normal situation.
In addition, 37% of establishments had to delay payments to suppliers and employees, whereas 36% of them had to get loans from friends, family, relatives to cover the shortage in cash flow.
As a response to COVID-19 pandemic, 14% of the establishments had to dismiss and let go of their employees to face the financial crisis resulted from the Coronavirus pandemic.
Whereas 9% of the establishments reduced the salaries and wages of their employees, and 11% of them gave their employees unpaid leave while 9% of them gave their employees a paid leave.
The expected percentage change in production for the next three months that establishments anticipated to be was a decline of 47% compared to the same period last year. As for the number of employees, they expected that it will decline by 24%.
Source: Palestinian News & Info Agency (WAFA)