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Wednesday, June 19, 2024

Pandemic forces nearly 35,000 firms out of market

The Saigon Times

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HCMC – Roughly 34,900 firms nationwide have been affected by the ongoing coronavirus pandemic and have withdrawn from the local market in the first quarter of the year, up 2% year-on-year, Nguoi Lao Dong newspaper reported.

The data reflected a common trend among affected enterprises. Most of them are hibernating, awaiting a clearer understanding of Covid-19 before making a final decision on what to do next, according to a recent report from the Ministry of Planning and Investment.

Of the withdrawn firms, 18,600 companies have temporarily suspended their businesses, up 26% versus the same period last year. More than 12,000 other enterprises have halted operations pending dissolution, down 20% compared with the year-ago figure. Some 4,100 others completed procedures for disbandment, dipping a fractional 0.02% year-on-year.

The hardest hit companies mainly operate in the fields of real estate, art and entertainment, tourism, lodging and dining services, logistics and education and training.

Specifically, 493 realty firms have taken a hit from the fast-spreading disease and temporarily stopped operations, up a staggering 94% against the 2019 figure.

More than 1,000 companies in the tourism industry have been hit as well. The flu-like illness also hit 936 lodging and dining service providers and over 1,100 logistic operators.

There was also only a modest increase in the number of newly established enterprises and a drop in the amount of newly registered or additional capital.

There were over 29,000 new businesses nationwide in the quarter with total registered capital of VND351 trillion, up 4.4% and down 6.4%, respectively, compared with the same period in 2019.

The first quarter of each year typically sees the highest number of firms resuming operations, as this is when they map out business plans for the new fiscal year.

However, in this year’s first quarter, 14,800 companies resumed operations, dropping 1.6% year-on-year, while the figure in 2019 had risen by 78%.

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