Banque nationale de Belgique : The direct economic impact of the second lockdown is limited for the moment, but the outlook for Belgian firms remains bleak

At aggregate level, the proportion of firms surveyed mentioning that bankruptcy was either likely or very likely in the coming weeks or months has risen from 8 % in October to 12 % in November. However, the increase in the risk of bankruptcy may be partly attributed to the higher share of small firms in November's sample. These enterprises are ostensibly confronted with a higher risk of bankruptcy in the coronavirus pandemic context.

The perception of a greater risk of bankruptcy is confirmed by the replies to other questions posed in the survey regarding the risk of bankruptcy. On the one hand, in response to the question 'Has your company been declared bankrupt or has it already filed for bankruptcy?', 8 % of companies said they were currently involved in bankruptcy proceedings or would be starting them over the next six months, compared with just 5 % in October. On the other hand, the firms questioned consider that 11 % of companies operating in their own sector of activity have already filed for bankruptcy or are currently involved in bankruptcy proceedings, compared with 8 % in October. The different questions bring additional information and are therefore not entirely comparable, but the common thread is the upward trend in the perceived risk of bankruptcy.

As regards liquidity problems too, a worsening of the situation is reported in the November survey. The share of firms surveyed pointing to cash-flow problems has gone up from 32 % in October to 35 % in November. Some deterioration is also observed among responses to the question ''For how long can your company meet its current financial liabilities without having to draw on own funds or new loans?''. While in October, 23 % of firms surveyed said they could cope for three months at most, this percentage is up to 27 % in November. Between October and November, the liquidity position has deteriorated sharply in the non-food retail sector and the transport and logistics sector.

Recourse to temporary lay-offs is rising but is still well below April levels

One of the support measures announced on 6 November was the reintroduction of temporary lay-offs on grounds of force majeure for all companies. According to the November survey, 11 % of private sector employees were on temporary lay-off, against 6 % in September and 7 % in October. At the current juncture, this is in strong contrast to the 32 % reported by firms at the beginning of April, which is another indication that the direct impact of the latest lockdown is weaker than in the spring. However, recourse to temporary lay-offs could soon gain ground as just over one in every two firms (excluding the self-employed) said that, in the coming weeks, it would make greater use of temporary lay-offs than currently, in line with the further relaxation of the temporary lay-off scheme.

The proportion of private sector employees working from home has risen considerably between October and November. While in October, 22 % of employees alternated between on-site work and working from home (i.e. partial teleworking), no more than 9 % of them did so in November. With full-time teleworking now the general rule, the share of employees who do all their work from home has risen significantly, up from 21 % in October to 30 % in November. Widening recourse to teleworking is nevertheless not possible for all companies, and the main obstacle mentioned by firms questioned is still the type of work (for 57 % of the respondents). Lack of equipment or inadequate training of employees remain secondary factors (cited respectively by 6 and 2 % of the respondents).

Employees off sick or in quarantine account for 3.4 % of private sector employment, compared with 3.2 % in October and 2.2 % in September. This percentage is clearly higher in sectors where teleworking is not so easy.

The coronavirus crisis is causing a structural rise in e-commerce

Customers' fears of getting infected with the virus and the compulsory closure of certain categories of physical sales outlets have led a lot of companies to develop remote sales or on-line ordering systems. The proportion of firms surveyed generating revenue through remote selling or ordering has increased sharply compared with the period before the coronavirus crisis, and especially in consumer-oriented sectors of activity. This percentage has risen by about 8 points in food and non-food retailing, accommodation and food services, financial and insurance activities. It is also up, albeit to a lesser extent (some 4 percentage points) in real estate, support services, information and communication, the manufacturing industry and agriculture. Moreover, this increase is structural, with many firms questioned saying that it would not drop back after the coronavirus crisis and that would even gain further ground in financial and insurance activities. This general trend could also boost the need for a suitable regulatory framework.