In the last quarter of 2020, the ILO supported the Organization of Employers of Macedonia (OEM) and Business Confederation of Macedonia (BCM) in conducting a second countrywide enterprise survey with the aim to track business challenges and needs resulting from the protracted COVID-19 crisis. The survey helped to assess the effectiveness of economic emergency measures implemented through the four support packages launched by Government so far. Additionally, the survey sought to identify the type of support expected under the fifth support package. Wage subsidy, initially discarded by the Government was assessed as the most sought-after type of support by the enterprises. The evidence collected through the survey was crucial in informing the Government decision to extend the wage subsidy schemes for enterprises, which was included in the new support package, adopted in February 2021.
According to the survey results, the vast majority of enterprises (83 per cent) resumed their operations in the fourth quarter of 2020. Of these enterprises, more than a half operated fully on site, which was the case for only one fifth of enterprises during the spring lockdown. A further one quarter of enterprises were combining on-site operations and teleworking at the time of the survey. Positively, the proportion of enterprises operating below the optimal levels dropped from a near 20 per cent to some 7 per cent. Furthermore, only 1 per cent of enterprises were not yet in operation, which was a significant improvement compared to 9 per cent in the second quarter of 2020.
An overwhelming majority of enterprises (86 per cent) experienced a decline in revenues compared to the same period of last year. Employee absenteeism, demand shortfall and delay in customer payments were reported as the most critical operational challenges that induced a sharp drop in cash flow, which a significant share of enterprises (64 per cent) addressed by using their own reserves. About a third of enterprises resorted to loans, of which 24 per cent relied on commercial loans and 11 per cent on loans from the Development Bank of North Macedonia. To improve their business resilience, over a half of enterprises surveyed offered new products and services or made modifications to the existing ones.
Unsurprisingly, a significant share of enterprises implemented teleworking, an option very rarely used prior to the crisis. About 67 per cent of enterprises used teleworking during the spring peak compared to only 9 percent during the pre-crisis period. About a third of enterprises indicated that they would continue implementing remote work and flexible work arrangements when the pandemic is over. Similar to the results of the first survey, the second survey showed that only a small proportion of enterprises (12 per cent) resorted to dismissing workers despite the massive economic challenges brought by the pandemic. Enterprises resorted to alternative strategies to reduce staff costs, such as reducing/delaying increases in wages or annual bonuses, reducing/freezing recruitment of new staff and reducing staff development costs.
Enterprises displayed relative dissatisfaction (expressed by 61 per cent) with the adequacy of the measures included in the four support packages. Of these, 18 per cent perceived the measures as totally inadequate, while 43 per cent believed the measures could have been better. A large proportion of enterprises (41 per cent) expressed the need for a fifth package of measures. Wage support was identified as the most needed type of support by over one third of enterprises, followed by additional loans subsidized or guaranteed by the Development Bank of North Macedonia. Respondents also mentioned the deferral of tax credits, as well as some “soft” measures, such as better information about the available measures and better services from public institutions.
Carried out online between October and December 2020, the report provides the views of 246 enterprises that completed the survey. In addition, a number of in-depth interviews were conducted in December 2020, in order to give the analysis more depth and shed light on some survey results. The first assessment on the Impact of COVID-19 pandemic on enterprises in North Macedonia was conducted in May 2020.
The new report “Evolving challenges and expectations facing Macedonian enterprises during the COVID-19 pandemic” is downloadable from here. Enterprise surveys are forthcoming for Albania and Kosovo in March/April 2021.