The pandemic Covid-19 reduced the turnover of companies with less than 49 workers almost 20% last year and 10% employment in this type of company, above the damage suffered by the larger companies, while at the same time affecting the hostelry, with a drop in sales of 45.5%, and 35% in the case of employment. In the other sector services the drop was 32.2% and 19.4%, respectively.
In addition, companies located in rural zones suffered a lesser impact of the pandemic on their billing and employment than those located in urban centers. This is clear from an analytical article on the economic impact of covid-19 in Spanish companies, according to the survey Bank of Spain on business activity with more than 4,000 responses received, which reflects that the Covid crisis had a “very uneven” impact in 2020 by sectors and regions.
The results show that turnover and employment fell more in smaller companies and that the crisis has had more negative effects on younger companies, the least productive and those located in urban areas, within each sector and region. In the case of employment, a higher temporary employment ratio is associated with greater declines in employment.
According to the results of the survey, the crisis derived from the covid reduced turnover by 16.1% in all Spanish sectors and employment contracted by 8.6% last year. By sectors, the average company that operates in the hospitality industry experienced, at the end of 2020, a drop in its turnover of 45.5% compared to the same period in 2019, while this decrease was 12.7% in the manufacturing industry and 32.2% in other services. They followed administrative services (-16,8%), transport (-16,3%), trade (-15.6%) o construction (-12,2%).
In the case of employment, although the decreases were smaller, the disparity between branches remained, so that the respective decreases in the manufacturing industry and in the hospitality industry were 5.5% and 35%, respectively. After the hotel and catering industry, the greatest reduction in employment occurred in other services (-19.4%), administrative services (-11.9%), commerce (-7.3%) and construction (-5.2%).
Ertes as a mattress
The Bank of Spain explains that the comparatively higher decline in turnover in relation to employment is a characteristic that is observed in a generalized way by activity branches, which confirms the evidence from other sources, such as the National Accounts, that occupation has withstood the effects of the crisis better than added value.
The relatively moderate impact on employment may be related, according to the agency, to the fact that, although persistent, the crisis is perceived as a “predominantly transitory” event, which would have been reflected in the generalized use of for him.
It also indicates the existence of substantial differences in the characteristics of the companies by branches. For example, compared to hospitality, manufacturing companies are, on average, 40% more productive and eight years older; they are more frequently located in a rural setting; they have less indebtedness, and their size, measured by the number of employees, is higher.
Regarding the impact of the COVID disturbance depending on the size of the companies, in terms of sales, the smallest companies suffered a more pronounced fall, of 19% year-on-year in those with fewer than 10 employees and of almost 18% in those with a number of workers between 10 and 49.
Large and medium-sized companies
For their part, although medium-sized and large companies also suffered the effects of the crisis with intensity, they reported somewhat less marked declines, close to 12%. Specifically, 12.6% in companies with between 50 and 249 employees, and a decrease of 12.4% in those with more than 250 employees.
Regarding effective employment (discounting ertes), the impact of the crisis was also lower in larger companies, with decreases of 5.9% in those with more than 250 employees and 7.2% in those with between 50 and 249 workers, respectively, compared to the decline of approximately 10% in the smallest companies.
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The smaller companies exhibited a more intense decline in their activity in 2020 than the larger ones belonging to the same sector of activity. In particular, in companies with less than 10 employees, turnover fell 1.3 percentage points more than the average for the sector, while in large companies it was 4.4 percentage points higher than the average.
In the case of employment, small companies also reported a greater drop than large ones in effective terms. The supervisory body points out that these differences are due to the “greater vulnerability” of small companies due to their lesser possibilities of accessing external financing, as well as their less diversification by products and markets.
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