Firms short of contracts, won't make redundancies - survey

A total of 77 percent of businesses in Czechia describe a lack of orders as the biggest problem preventing their return to the pre-coronavirus level, with 55 percent of them planning no dismissals, according to a June survey by the Confederation of Industry. Firms are cutting back on non-wage costs in response to the virus-related problems, the survey showed.

Some 52 percent of respondents reported an over 20 percent drop in new order volumes. The share of firms predicting a 20 to 40 percent annual fall of order volumes in the next two months increased from 20 percent in April to over 30 percent in June. This mainly applies to large enterprises, the survey found. A half of those polled said trading partners' problems were the main obstacle to resuming their full operations.

Two thirds of businesses said their investments will be lower than planned this year because of the coronavirus epidemic, and 43 percent said they would spend less on investments next year.

Some 5 percent of respondents shed jobs in April, and the share rose to 14 percent at the end of June. Sixteen percent of employers said they would wait until September to see if the Antivirus programme is still in place. Under the programme, they would get partial compensation for their wage costs.

Firms are seeking ways to raise resistance to potential crises in the future. A total of 45 percent of firms want to invest in new business models, over a third plan to expand their product portfolio, and a quarter will invest in digital transformation. Confederation of Industry president Jaroslav Hanak appreciated the fact that a number of firms are also seeking other ways out of the crisis, not focusing only on cost-cutting measures.

The Confederation and the Finance Ministry are currently discussing the possibility of faster tax write-offs. The survey showed that the measure would help firms in the car, chemical and electrical industries, said Hanak. The survey was conducted among 135 firms on June 24-29.

Source: ČTK