Loss of livelihoods: 216 more businesses go bang
A total of 216 liquidations recorded this March is an increase of 49% compared with the same month last year, says Statistics SA.
Voluntary liquidations increased by 61 cases and compulsory liquidations increased by 10 cases.
The total number of liquidations increased by 18.9% in the first four months of 2021 compared with the first quarter of 2020.
Financing, insurance, real estate, business services (77 liquidations), trade, catering, and accommodation (47), and manufacturing (10) are the hardest hit, Beyond-Covid, a registered non-for-profit company, said of the data released by StatsSA on Monday.
The hardship is a direct result of the past year and affects smaller companies the most, said the organisation. Despite economic improvements, the situation in SA remains precarious.
“It is not that more companies suddenly found themselves in trouble. Many of the businesses that folded in March this year, in all likelihood mostly smaller and medium-sized businesses, have struggled for many months before having to close, if not longer,” said Lings Naidoo, co-founder of Beyond-Covid.
Launched last year during the hard lockdown, the Beyond-Covid Business Survey, conducted by specialist management consultancy Redflank, aims to evaluate the impact of the Covid-19 pandemic on SMMEs in particular.
Naidoo said: “Our research has shown that smaller, micro, and medium-sized businesses, in general, are 26 times more likely to close their doors in times of economic upheaval than their corporate counterparts.”
He said 26% of SMMEs that participated in the survey had to close during the lockdown, temporarily or permanently, 54% of respondents said they were working below their usual capacity, and a third expressed the need for funding to continue to trade.