世界发展银行-The-Firm-Level-Impact-of-the-COVID-19-Pandemic---Summary-of-Results-from-Round-3_3页_6mb

The Firm-Level Impact of the COVID-19 Pandemic

Core Content

This document presents a summary of the findings from the third round of a firm-level survey conducted by the World Bank in Myanmar between May and August 2020. The survey aimed to assess the impact of the pandemic on businesses, including their operational and financial outcomes, as well as their responses to the crisis.

Main Findings

• Temporary Closures:

  • The share of temporarily closed firms increased slightly in August compared to July, reaching 7% on average.
  • Except for firms in Chin and Dry zone, the share of closed firms increased across all geographical areas.
  • Agriculture firms were the most affected, with 10% still closed in August.
  • Female-owned firms were more likely to be temporarily closed (9%) than male-owned firms (5%).

• Impact on Sales and Profits:

  • The overall negative impact of the pandemic on firms remained significant.
  • Sales reduction was the most common adverse effect, with 81% of firms reporting a decline in sales in June.
  • Profit loss was reported by 72% of firms in June, an improvement from May but still higher than March.
  • Medium-sized firms were the most affected in terms of profit loss, with a 63% decrease compared to the same period last year.
  • Large firms showed a dramatic increase in profit loss from 50% in March to 81% in June, indicating a loss of resilience.

• Cash Flow Shortages:

  • Loans from friends and family remained the primary source of funding for cash flow shortages, with only 8% of firms turning to commercial banks.
  • Agriculture firms continued to be the most reliant on loans to address cash flow issues.
  • The use of loans from all sources decreased between May and June, suggesting a reduced reliance on external financing.

• Adjustment Measures:

  • Digitization became a more common response in August, with over one-third of firms adopting online and digital platforms for business functions.
  • Changes in production and services increased by 2 percentage points, and increased delivery of products by 5 percentage points.
  • Remote working remained low, with only 3% of firms still using it.
  • Customer and employee safety measures decreased slightly, with regular workplace disinfection being the only measure that increased in June.

• Government Support:

  • 61% of firms were aware of economic support programs in August, but only 20% applied.
  • Access to loans and credit guarantees was the most urgently needed form of support.
  • Tax deferral or relief gained traction as a priority, with 17% of firms reporting it as one of the most needed.

• Fear of Arrears:

  • In August, 53 percentage points more large firms reported a fear of falling into arrears in the next three months compared to July.
  • This was the largest single increase in reported negative impacts across the entire data collection period.
  • All sectors experienced an increase in fear of arrears, though large firms were most concerned.
  • Despite this, almost all firms expressed confidence in remaining operational for the next month.

Key Information

• The survey involved 500 firms across various industries and sizes, including both formal and informal sectors.
• Three rounds of data were collected in May, July, and August 2020.
• The recall period for sales, profits, loans, and delays was lagged, with Round 3 data referring to June.
• Geographical zones showed varying levels of impact, with Chin and Dry zone firms being less affected.
• Sectoral impacts were mixed, with service and retail firms recovering, while agriculture and manufacturing firms remained the most affected.
• Female-owned firms were more vulnerable to the pandemic's effects, particularly in terms of temporary closures and cash flow issues.

Summary of Trends

• Improvement over time: Most areas showed improvement in terms of negative impacts compared to May, though sales and production reduction remained the most significant challenges.
• Sectoral differences: Agriculture and manufacturing firms continued to be the most affected, while service and retail firms showed some recovery.
• Gender disparities: Female-owned firms were more likely to face adverse effects, but there was a notable shift in access to credit in August.
• Adjustment strategies: Firms increasingly adopted digital platforms and modified their operations, though remote working and safety measures saw limited adoption.
• Government support: Awareness of support programs increased, but actual application remained low, with a strong preference for loans and tax relief.

Conclusion

The pandemic had a profound and uneven impact on firms in Myanmar, with agriculture and manufacturing firms suffering the most. Female-owned firms faced greater challenges, particularly in terms of temporary closures and access to credit. Despite these difficulties, firms showed a growing ability to adapt through digital transformation and operational changes, though confidence in financial stability varied across sizes and sectors. The need for targeted government support, especially in the form of loans and tax relief, remained critical for firm survival.