Over 70 percent of the Romanian companies are not ready for situations like the coronavirus epidemic. Most of the firms based in Romania expect negative economic consequences in the upcoming period, basically in all activities from supplying to price hikes and financial deadlock. The Covid-19 outbreak represents an unprecedented test for the Romanian economy included, says a Frames barometer conducted on 300 companies in our country.
The study argues that, besides the fact the epidemic has prompted the closure of numerous factories in China or the halt of production in others, the coronavirus spread in Europe, and particularly in Italy, which is one of Romania’s main trading partners, could generate significant economic deadlocks.
The survey found out that 72% of the investors stated they had not risk management plan for such a situation, while only 11% said they had developed a plan to continue their business.
In terms of coronavirus’ impact on business, 57% of the surveyed companies said that the epidemic is currently affecting their business to a certain extent, but no important processes are impacted.
17% stated that the economic effects of Covid-19 are blocking the major processes of the production/business, while 9% revealed that the impact is major. 17% responded that the outbreak is not effecting their business for the time being.
On the other hand, many of the Romanian companies haven’t enough stocks to cover a potential syncope on the supplying chain, and this might have a serious impact on their activity.
The barometer also shows that, on another hand, that among the companies that have some risk management plans, only 27% have also considered the occurrence of a medical emergency, for instance.
However, the business picture in Romania reveals a sad reality, as over 90% of the companies are SMEs, with a low financial strength and a limited business know-how. A risk strategy is only familiar to big companies, especially across multinational ones. However, even they have considered less the risk of a medical pandemic.
The barometer has been conducted during March 2-8, 2020, through online quizzes, by phone or e-mail, on a sample of 300 companies operating in Romania in various sectors, from commerce, to financial services, agriculture, energy, clothing or IT.