Central American companies have cut 42% of their staff due to COVID-19
The Federation of Central American Chambers of Commerce (Fecamco) reported today that the economic scenario due to the coronavirus is unsustainable for the Central American productive sector.
92% of the companies surveyed have maintained a drop in their sales, having relevant impacts in cash flow, reduction of operations and suspension of personnel.
40% of the respondents indicated that they are not operating and 47% that they are partially operating. Of this last segment, 57% are operating below 40% of their capacities.
Raúl Delvalle, president of Fecamco said that due to the situation, companies reported that they have been forced, on average, to cut 42% of their personnel and suspend 52% of their workers.
"The situation becomes more worrisome since companies also stated that if the situation continues for additional weeks they will be forced to sharpen their measures, expecting to reduce or suspend by 50% more the little personnel they already have," said Delvalle .
Another extremely important result is that 50% of the companies surveyed indicated that they will need between 4 to 9 months to reach the level of invoicing that they maintained before the crisis; 20% indicated that they need more than a year, while 50% of MSMEs will need from 7 months to more than a year to recover.
Central American businessmen expressed that the most immediate measures to take to solve their liquidity problems are mainly: requesting loans, delaying payment to suppliers and having to reach long-term arrangements to face taxes; As a fourth measure, companies indicated that they stop paying wages, which shows: the need for liquidity that already exists and that they will seek to be solved through a loan and that companies are making great efforts to avoid layoffs.
The above reflects, according to the president of Fecamco, "the need that exists in the region for governments to promote economic reactivation credits for companies, with agile processes and reasonable guarantees, especially for MSMEs , independent of the productive sector to which they belong, as well as promoting a tax reform in Central America that allows a simple, efficient and transparent tax system with low and competitive collection rates that leads to reducing the administrative cost of business, expanding the tax base and generating higher revenues for the State. "
40% of the respondents indicated that they are not operating and 47% that they are partially operating. Of this last segment, 57% are operating below 40% of their capacities.
Raúl Delvalle, president of Fecamco said that due to the situation, companies reported that they have been forced, on average, to cut 42% of their personnel and suspend 52% of their workers.
"The situation becomes more worrisome since companies also stated that if the situation continues for additional weeks they will be forced to sharpen their measures, expecting to reduce or suspend by 50% more the little personnel they already have," said Delvalle .
Another extremely important result is that 50% of the companies surveyed indicated that they will need between 4 to 9 months to reach the level of invoicing that they maintained before the crisis; 20% indicated that they need more than a year, while 50% of MSMEs will need from 7 months to more than a year to recover.
Central American businessmen expressed that the most immediate measures to take to solve their liquidity problems are mainly: requesting loans, delaying payment to suppliers and having to reach long-term arrangements to face taxes; As a fourth measure, companies indicated that they stop paying wages, which shows: the need for liquidity that already exists and that they will seek to be solved through a loan and that companies are making great efforts to avoid layoffs.
The above reflects, according to the president of Fecamco, "the need that exists in the region for governments to promote economic reactivation credits for companies, with agile processes and reasonable guarantees, especially for MSMEs , independent of the productive sector to which they belong, as well as promoting a tax reform in Central America that allows a simple, efficient and transparent tax system with low and competitive collection rates that leads to reducing the administrative cost of business, expanding the tax base and generating higher revenues for the State. "