Economy vs. coronavirus: Companies in Romania expect significant negative impact on their businesses

Close to one in five (18%) companies in Romania that participated in a PwC survey estimate a reduction of up to 20% of the revenues as a result of COVID-19 pandemic impact on business, while the majority (65%) haven’t made assessments yet.

Another 6% of the respondents estimated a decrease of revenues between 20-50%, 2% consider that the decrease will be between 50-80%, while 9% don’t expect a reduction, according to the PwC Romania HR Barometer.

Of the economic sectors where companies expect a decrease in revenues of up to 20%, transports are detached with a large percentage of answers (75% of the respondents in this sector gave this answer). Also, 25% of the companies surveyed in the automotive industry (manufacturers and distributors) believe that the decrease in revenues will be up to 20%. The same estimate was made by 22% of responding companies in financial services, 21% of consumer goods (distribution, logistics), and 20% of energy.

“The first sectors that feel the impact of the COVID-19 pandemic are those that depend on people's mobility: transport, hospitality, tourism. But the negative effects will gradually be transmitted to other fields of activity because all industries are interconnected. For this reason, rapid measures are needed for the survival of those seriously affected, as well as a medium-term economic recovery plan. I believe that, in the first phase, the measures to be taken must ensure cash flow continuity for those whose revenues are reduced sharply. I am referring to the payment of the debts that the state has towards companies, for example, the immediate VAT reimbursement, the amounts for medical leave, as well as the postponement of the payment of taxes and contributions. In the second phase, after a more thorough impact assessment, a plan of measures should be devised to support the private environment in order to maintain jobs and, implicitly, the incomes of the population and companies,” said Daniel Anghel, Partner, TLS Leader of PwC Romania.

What measures have local companies implemented to protect their employees?

About nine in ten (89%) of the companies that participated in the same PwC survey said their performed disinfection in the office, 85% limited the interactions, 58% instituted work from home only for those who can work remotely, 40% offered protective equipment, 25% implemented work at home for all employees, 13% decided on mandatory work from home and 13% only for the employees who traveled to risk areas.

“The survey includes the opinions expressed by companies shortly before the authorities announce the establishment of a state of emergency, which will clearly speed up the taking of other measures of social distancing and limitation of interaction. I noticed from the analysis of the answers that most of the companies have already taken firm measures to protect the employees without being forced by normative acts issued by the authorities. As can be seen, all the respondents considered that it’s safer that at least some of the employees work from home or in shifts, where permanence must be ensured, showing concern for people and at the same time, social responsibility,” explained Ionut Sas, Partner, People & Organization Leader of PwC Romania.