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One in five companies says they cannot survive for more than a maximum of three months.
Despite huge crisis packages to counter the financial impact of the coronavirus, unemployment is increasing and home sales have stopped.
Now, a new survey shows that more and more companies expect even higher unemployment, and many hope they won’t survive the crisis.
It shows a new survey conducted by Sentio for Sparebank 1 SMN in which more than 600 business executives were asked about the consequences for their company.
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– dramatic
– The study surprised me on the negative side. The feedback we get from the business community is very dramatic and serious, says Sparebank 1 SMN Vice President Vegard Helland.
According to the survey Nettavisen Økonomi has accessed, there is a big difference between before and after Norway’s closure on March 11. For example, 48 percent of companies surveyed believed that sales would increase during the year. Turnout has now dropped to 31 percent.
13 percent of respondents say they also hope to reduce the number of employees at the company.
– A very large proportion expects turnover and increased unemployment. We are excited about whether this is a warning that this will affect the Norwegian economy more than we have thought so far, Helland says.
At the same time, the CEO emphasizes that there are great regional differences. For example, he thinks western Norway is severely affected due to the collapse of oil prices.
Sparebank 1 SMN has conducted this survey for a long time and has a time series dating back to 2001. Compared to the 2008 financial crisis, the decline is seen to be much deeper now.
– Looking back on the financial crisis, you see that it was not that deep. The crisis we are facing now is broader and deeper, Helland tells Nettavisen Økonomi.
The one in five companies also declares that they cannot do more than one or three months with the closure of the community.
– The business is quite fragile in Norway. Of small and medium-sized businesses, 20-25 percent have a deficit each year. 10 percent have negative equity. They go from hand to mouth a lot, but they do it well.
Expect bangs this summer
The Executive Vice President himself believes that crisis packages will work through government-guaranteed loans and the compensation scheme. But he is particularly concerned about summer.
– When we see that society begins, some of the employees of closed companies will have a more normal daily life. Then we will have a thunderstorm in the summer. But there is a period when companies need working capital to start again. But then summer comes, Helland says.
And then the vacation money will be paid. He predicts that there can be big problems for many companies that simply don’t have the money to pay for people’s vacation money.
– I think the great test that we only have in June and July, when the holiday payment is paid. Many companies may find themselves in a situation where they don’t have the liquidity to pay for vacation money, he says.
The bank will propose measures to ensure that companies can survive vacation pay in the summer months.
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