FGV: 42% of business people foresee normalization of activities only in 2021
In an effort to understand the pandemic’s impact on business people and consumers, Fundação Getulio Vargas’ Brazilian Institute of Economics (FGV IBRE) carried out another special survey. The preliminary results in August show that 42.1% of business people believe their operations will only return to pre-pandemic levels in 2021, while 10.4% are unable to visualize a return to this level even by then. On the other hand, 25.1% said they are already back to normal.
In line with previous surveys, business people in the services sector – the hardest hit by COVID-19 – were the most pessimistic about the recovery. Just 16.6% of service companies are operating normally, 47.2% of them think things will be back to normal in 2021, and 14.7% cannot even visualize such a recovery.
“In general, the results show that the services sector, especially the ‘services provided to families’ segment, still has an arduous path until full recovery. As long as there are doubts regarding the economic recovery and especially the labor market, and while some types of establishments still have operating restrictions and people do not feel comfortable returning to them, this sector will be severely impacted,” says Renata de Mello Franco, an economist at FGV IBRE and one of the people responsible for the survey.
The “services provided to families” segment has the highest proportion of business people who only expect a return to normal next year (66.0%). It also has the second highest percentage of those who cannot visualize such a recovery (16.9%). A previous survey by FGV IBRE found that many consumers had no immediate plans to go back to cinemas and theaters (80.1%), bars and restaurants (64.3%), or go away on vacation (70.4%).
On the other hand, there are positive signs in the industry and commerce sectors, in which 30.4% and 32.5% of business people, respectively, said their companies are already operating normally again.
More than half of low-income families strongly affected
According to the survey, 55.1% of low-income families (who receive up to R$2,100 per month) have been heavily affected by the pandemic. On the other hand, this same income group contains the highest percentage of households who said they have not been affected. This result may be explained by people who have not stopped working and those who have received emergency welfare assistance, meaning that their income and consumption levels have not fallen significantly. In general, 48.7% of consumers said they have been heavily affected, 26.6% affected, 18% slightly affected, and just 6.7% not affected at all.
Regarding consumers’ main concerns, the higher the income level, the greater the concern about health and social isolation, and the less the concern about the financial impact. Low-income groups are more worried, especially about financial issues like unemployment and the deterioration in household finances. On the other hand, among the highest income group, the impacts have been less intense, and more related to physical and psychological health.
For this survey in August, FGV IBRE interviewed 1,510 consumers, 668 industrial companies, 489 construction companies, 1,212 service companies and 498 commerce companies between August 1 and 14.