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What are the findings of Productivity SA survey on pandemic’s impact on SMMEs?

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Productivity South Africa has conducted a survey on the negative impact that the pandemic has had on small, medium and micro enterprises’ productivity and competitiveness.

Productivity South Africa conducted an online survey on the impact of COVID-19 on small, medium and micro enterprises (SMME) productivity and competitiveness, and the role of digital technology, sharing its findings on Monday, 19 July 2021. Productivity SA stated that the lockdown regulations have negatively impacted SMMEs, with many having to resort to closing down indefinitely, shedding jobs, and negatively impacting their productivity. Productivity SA identified that a persistent productivity gap exists between SMMEs and larger enterprises that are able to exploit economies of scale and invest more in machinery and skilled workers.

In the survey, Productivity SA stated that retrenchments impacted the SMME labour force. Thirty-eight percent of SMMEs confirmed that they had to retrench staff, with most retrenchments occurring in micro enterprises at 48 percent, followed by the medium and small enterprise at an equal distribution of 24 percent. Productivity SA further stated that the impact of the lockdown on business operations has been significant, with half of the SMMEs indicating that they had to stop operations. In particular, 44 percent of micro enterprises stated that they had to temporarily stop due to government restrictions, reduced orders from customers, as well as COVID-19 cases occurring in their businesses.

According to the survey by Productivity SA, 82 percent of SMMEs experienced a reduction in revenue, with micro enterprises noting that they lost more than 50 percent of their revenue. An overwhelming majority of respondents, 86 percent, indicated that the reduction in sales was due to low customer spending driven by reduced demand. Productivity SA also stated that the COVID-19 pandemic accelerated the transition to a remote working arrangement, with only 47 percent of respondents indicating that they could accommodate remote working, whereas 53 percent could not. Productivity SA emphasised that an improvement in SMMEs requires a holistic approach at national, sectoral and enterprise levels.

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Mahlohonolo Lakaje
[email protected]

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