How COVID-19 Pandemic has affected the Small Scale Industries
In March 2020, the WHO announced COVID-19/Coronavirus as a global pandemic, this initiated an economic recession across the world economy causing a sharp adverse impact on many small scale industries and affecting all sectors in terms of production, jobs, and trade.
Micro, small and medium enterprises represent about 85% of businesses, 70% of global employment, and contribute to 45% of GDP in the emerging economies and small scale businesses are the most affected by the fall-out of the pandemic. The small-cap companies generally are into recreational businesses such as entertainment, tourism, catering, etc and a high proportion of these businesses are stopping operation, particularly non-essential services.
Through April 30, 2020, small caps have recovered less than half of their 2020 losses while large caps had recovered almost 60% of their losses. The Russell 2000, an index of the smallest two-thirds of the stocks in the Russell 3000, fell by 40.8%, while the S&P 600, another small-cap index, fell by 41.4%, and over the past 12 months, the small-cap stocks have underperformed the broader market providing investors with a total return of 9.2% compared to the S&P 500's total of 23.9%.
Over 75% of small businesses are experiencing a reduction in revenues and 33% of businesses anticipate losing more than half of their revenues, also 9 out of 10 businesses are experiencing a shortage in cash flow. In eight countries across four continents, 65% have had to shut down operations and 50% have temporarily closed their business due to reduction in orders, by following direct instructions from the authorities or cases of Staff COVID-19 infection. Others are taking steps to protect workers from COVID-19 by informing their staff about the preventive measures, social distancing, and even by providing personal protective equipment.
There is not a single business which is not affected by the pandemic, stay determined and integrate social distancing and all the major precautions in your sectors and reinitiate the sales & marketing processes, this is not the first time businesses are being hit hard financially, take time and pick up pieces from where you left.