TIRANA, June 12
Companies in Albania consider replacing import goods will domestic sourced products as a response measure to post-COVID-19 recovery a recent survey by Albania Investment Council suggests. This is one of the insights of the ‘Impact of the coronavirus pandemic on the business in Albania’ conducted by the Investment Council during the period when the COVID-19 were in place. The findings of the survey are based on data collected from a total of 833 companies throughout the 12 Albanian regions.
Key findings of the survey
All economic sectors considered to be negatively impacted; 97 percent of companies expect their activity to be very negatively or negatively impacted, only agriculture has 4.8 percent expectations not to be affected. Also, 62 percent of exporters expect to be very negatively impacted.
Overall, 47 percent of companies totally stopped work during COVID-19, while the other 53 percent have continued to work totally or partly. Among all economic sectors, tourism is the most affected with a 75 percent activity closure. At the contrary, agriculture continued to work partly or totally at 81 percent;
As relates to expectations to annual turnover, regardless of size or sector, all companies have the same expectations on COVID19 impact to their annual turnover – 80 percent of companies estimate more than 20 percent decline of their annual turnover.
The most common challenges faced by companies are a shortage of clients, lack of liquidity, difficulties at salary payments, and complying with tax payments. More specifically,
Agriculture, Industry, and Construction are unanimous when saying that lack of liquidity is their foremost concern; while tourism, services, and trade suffer a shortage of clients;
As relates to imports, 52 percent of companies declare to have had problems with imports mainly from EU countries. In the context of work continuity, some of them (69 percent) have been seriously damaged as they are highly dependent on imports, while 31 percent of them are considering replacing with local products partially or completely. The industry is more dependent on imports (83 percent of companies say they depend entirely on imports); While construction is less dependent (only 29 percent of companies). Only 2 percent of companies mainly operating in Trade, Industry and Services state that can totally shift from imports to domestic resources to ensure business continuity;
As relates to workforce incapability to present at work, 37 percent of companies confirm they couldn’t take any measure in time to address it, while 33 percent used annual leave and remote working from home (mostly services) and the rest considered lay-off as an option (mostly big companies).
To ensure business continuity, overall 34 percent of companies declare that will use previously accumulated revenue, while 32 percent will cut costs, mainly lay off employees, decline productions, etc.
Agriculture, construction, and trade will rely on banks.
Industry and tourism will cut costs while services will mostly use their accumulated revenues. According to the size, companies with revenues over Lek 8 million will cut costs to ensure business continuity while companies with turnover up to Lek 8 million will use accumulated revenues to ensure business continuity;
Regardless of the size or sector, most of the companies estimate that COVID19 impact will last up to 1 year;
Referring to the evaluation of government response measures, companies over Lek 14 million turnover estimate that postpone payments of loans will have the most positive impact; meanwhile, business with up to Lek 14 million turnover estimate that financial support to employees will have e great positive impact;
As relates to the use of the online services during COVID 19 period, 75 percent of companies declare to have used online services (mostly Services, Tourism and Industry); In the future, 81 percent of those will continue to re-use online services and the trend is the same among all sectors. As relates to the change in the future of investment plans toward online services, 40 percent of companies will focus their plans in the direction of online services, specifically in new technology, risk management, and strengthening of retail channels.
As relates to the business emergency plan, the situation seems quite problematic with 86 percent of companies having no approved emergency plan. Behavior is the same regardless of size or economic sector (service and industry seem to be better prepared).
The complete survey is available HERE
Source: Albania Investment Council