45% businesses have shut since Feb, collapse feared
Since Kuwait instituted lockdowns to reduce the spread of the COVID-19 virus last March, 45% of Kuwaiti business owners said they have suspended or shutdown their businesses.
Another 26% are on the verge of collapse after seeing their revenue drop by more than 80%, revealed a Business Impact Survey published by Bensirri PR (BPR), an independent corporate, financial and political communications firm based in Kuwait.
The report is the only COVID-19 related Business Impact Survey conducted in Kuwait and is available in full and free of charge on KuwaitImpact.com. Key Survey Findings:
1. Business closure rates are high, more closures expected To date, 45% of respondents have suspended or shutdown their businesses. Another 26% on the verge of collapse after seeing their revenue drop by more than 80%. With full curfew enacted in Kuwait on May 11th, more closures are expected.
2. Delay in legislation led to acts of survival in violation of existing laws In a desperate act of survival, 32% of respondents have adjusted employee hours or salaries in clear violation of Kuwait’s labor law. 15% have already started laying off staff instead of waiting for legislation to pass as Kuwait enters its third month of the crisis.
3. Shops closed, expenses remain, and government support absent Now in their third month of working capital pressure, 56% of business owners/ CEOs say they cannot afford to cover their fixed costs for another two months under the new status quo.
4. Most impacted sectors to date are Retail, Contracting, and Professional services (measured by revenue drop and status of operation) The Kuwait Business Impact Survey (KBIS) gathered key insights from 498 Kuwaiti businesses that were profitable in 2019 across 13 different sectors, and provides decision-makers with a direction to better understand policy decisions surrounding the future and sustainability of the Kuwaiti economy in a post-COVID-19 environment.
The survey was distributed between April 24 and April 28, 2020, during the partial curfew period and prior to the full lockdown announced that went into effect on May 11, 2020. The respondents were asked about the change in operations under COVID-19, their predictions on business outlooks, and their assessment of the Kuwaiti government’s response and responsibility during the outbreak. “This is a difficult period for the private sector in Kuwait, as they have taken many painful steps to weather the short-term economic impact,” said BPR Communication Manager and the lead on the report, Mohammed Almutawa. “The survey’s objective is to ground the conversation about the impact of COVID- 19 on local businesses with facts and numbers to help business owners and policymakers stay informed and navigate the current and future economic landscape.”
When asked about their outlook on market recovery, 45% of Kuwaiti business owners expect slower economic activity to extend into 2021. While 52% said it will take up to two full years for revenue to return to 2019 levels. The survey also found that only 15% of business owners are fully aware of the economic stimulus package announced by the Kuwaiti government, and 81% of respondents said that current government policies are harmful to their business when asked about their sentiment towards the government’s handling of the economy.
Source : Arab Times