…despite weakening effects of COVID-19 on businesses
Studies conducted by the Sekondi-Takoradi Chamber of Commerce and Industry (STCCI) revealed that investment shot up by some two percent in the last quarter of 2020 for businesses in the region, relative to prevailing conditions for the previous quarter three within the same year.
Comparatively, 70 percent of businesses maintained the same level of investment in their operations in the last quarter of 2020 whiles the previous three quarter three recorded just about 41 percent of businesses maintaining the same quantum of investment. These were contained in STCCI’s Business Condition Report.
Detailing reasons for these variations in investments, Deputy Chief Executive Officer of STCCI, Benjamin Nii Kpani Addy indicated that capacity extension needed for efficiency in operations and replacement demand have been the top most considerations for businesses in the Western Region over the past two quarters.
He indicated that in the third quarter report for 2020, about 39.9 percent of the investments made by businesses were into capacity extension, 18.2 percent in respect of replacement (thus to replenish stock) and 16.2 percent target at enhancing efficiency of the business activities.
Interestingly, he said the investment made in the final quarter for 2020 were largely in respect of increasing efficiency in satisfying customer requirement of 38.3% and 26.7 % aimed at replenishing stock.
Mr. Addy disclosed that due to the advocacy made overtime on the need to increase investments in safeguarding the environment, businesses increased their investment of 1.7 percent that was recorded in quarter three to 8.4 percent in quarter four for 2020. He prayed that this could be sustained and possibly increased to respond to climate change issues.
COVID-19 impact on businesses
Findings from the survey established that COVID-19 has adversely affected businesses in the Western Region. Sales fell drastically with quarter three recording about 65.3 percent and for the final quarter, 67.1 percent drop. This was accompanied with a 20.4 percent increase in the cost of operation for businesses in quarter three and 18. 2 percent in quarter four.
However, some businesses did make some gains; mainly with COVID-19 compelling businesses to be innovative. In quarter three of 2020, about 2.9 percent of the respondents of the survey indicated that the pandemic brought about some innovation in their work. In the same year, quarter four shot up to 3.2 percent.
Perception about prevailing conditions in the business environment
Among several factors that influenced performance of businesses in the two last quarters (quarter three and four) were financial constraints, spiking price of raw materials and energy cost, domestic demand as well COVID-19.
In quarter three, access to financial resources was deemed a major challenge for most businesses in the region, and thus accounted for 41 percent of the responses. The ensuing last quarter witnessed same but at 31 percent of the responses.
COVID-19, became the second factor that affected most businesses in the last quarter; as some 15 percent of the respondents admitted they had been affected.
COVID-19 however, became a trigger for an increase in local demand of 12.8% for produce and services in quarter three. In the last quarter, domestic demand shot up from 12.8 percent to 13.8 percent.
In consideration of these factors, businesses were largely satisfied with how things turned out in the last quarter of 2020. Relative to the 43.5 percent responses that were recorded in quarter three, the final quarter for 2020 had 57 percent of respondents indicating they were generally satisfied with the prevailing conditions. About 27.9 percent in the last quarter indicated that conditions were just as good and normal whiles 18 percent shared the same experience in quarter three.
Expectations for first quarter 2021
Nii Kpani Addy disclosed that irrespective of the challenges that were encountered in the last two quarters, about 77 percent of businesses as at the last quarter anticipated that things will get better in first quarter of 2021. According to him, most businesses trust that measures that have been effected along their operations would begin to yield some dividends in the new year.
About the Business Condition Survey
The business condition survey was introduced by Sekondi Takoradi Chamber of Commerce and Industry in 2016. The aim of the survey is to gather empirical data to support the chamber’s advocacy interventions. The Business Condition Survey employs the use of Computer-Assisted Personal interviewing (CAPI) technique to collect information on the performance of businesses in the Western Region.