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Three Out of Four Local Businesses Hurt by Pandemic

Study results released today by regional officials showed that 76 percent of Västerbotten companies have been adversely affected by the coronavirus crisis.

ÅLIDHEM – Västerbotten County published the results of its second survey of what kind of impact the pandemic has had on local businesses. Among the 217 companies that responded, 68 are located in Umeå. 76 percent said that they have been “adversely affected”, either directly or indirectly, by the crisis. This number is slightly lower than the last survey a month ago, when 80 percent said they were hurt.

“It is worrying that so many companies are affected, while the majority of them have not yet used the various available support programs,” said Anna Pettersson, the regional development director for Västerbotten. She was referring to the some 25 million SEK that Västerbotten made available at the end of March to help businesses weather the pandemic. Regional officials said that national government support has focused too much on large businesses at the expense of small ones.

The survey shows in more detail the seriousness of the economic crisis. 92 percent of businesses said that the crisis is having a long-term impact on their operations, and 65 percent said that demand for their product or services have decreased. 28 percent said it had increased.

The light-green slices of the pie chart represent the answer “don’t know”. –Region Västerbotten

The survey was carried out by Västerbotten County in cooperation with the Västerbotten Chamber of commerce and a coalition of local businesses, known as Företagerna.

20 percent of the companies say that they are at risk of bankruptcy, and officials expect a liquidity crisis in July.

Among the businesses that responded, one in five said that they see bankruptcy as a possibility. Since the crisis began, stores at Avion, cleaning companies, sports facilities, and many other local companies have already declared being at or near bankruptcy. The survey showed that in the past month, companies have taken measures to stave off being shut down, such as stopping marking and investments, reducing their payrolls, and deciding not to hire summer employees.

Anders Hjalmarsson, President of the Västerbotten Chamber of Commerce, and Anna Pettersson, Regional Development Director, Region Västerbotten. -Region Västerbotten

On average, companies said that they only have liquid cash available to last for about nine more weeks. That means that Västerbotten and Umeå will begin to face a liquidity crisis around the first week of July, the report says, unless something is done to prevent it.

The city’s businesses have, over the past two months, taken supporting each other into their own hands. An initiative called Local Hero Umeå has been encouraging residents to shop in Umeå during the pandemic, so that “all the companies that make Umeå wonderful will be in good shape after the crisis.” A Facebook group with almost 4000 members, Supporta Ditt Umeå, has brought businesses together in an effort to strengthen the city’s economy.

Umeå is postponing its 2021 budget because of uncertainty due to the pandemic.

Umeå’s Social Democrats, who are the leading party in city government, along with the Green Party, announced this afternoon that they were postponing from spring and summer to fall a decision on Umeå’s budget. The reason, they said, is that they do not have enough financial information in order to vote on a budget right now. They need “more time to analyze tax base forecasts and economic prospects for the coming year,” they said.

“We want to safeguard welfare and jobs. In order to do that, we need the best possible basis for decision-making,” said Hans Lindberg, Umeå’s highest-ranking government official.

“We expect the national government will take additional responsibility,” added Nils Larsen Seye, the Green Party’s Umeå group leader. “This also gives us more time to develop proposals for how we can develop Umeå in a sustainable way.”

Coronavirus statistics in the region remained virtually unchanged since yesterday.

The infection count and health care burden of coronavirus on Umeå and Västerbotten had probably their most stable day today since the crisis began. Only one new case of the virus was confirmed in the past 24 hours, bringing the regional total to 366. One fewer COVID-19 patient is in the hospital, with that total now 17. The number in intensive care and the death tally stayed the same at six and 17, respectively.

5 Comments

  1. SMS SMS Tuesday, July 28, 2020

    Thanks so much for the blog post.

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