The coronavirus’ brutal blow to the Mexican economy: 44,000 businesses at risk

The absence of people and the temporary closure of some places could culminate in the loss of around 250,000 jobs

Paralyzing the city because of COVID-19 will strongly affect hundreds of businesses, as they will not be able to withstand the temporary unemployment and will also have to lay off a large number of their workers.

Grocery stores, stationers, hotels, and other businesses will be affected by the health emergency in the country.

According to the president of the Chamber of Commerce, Services and Tourism in Small Mexico City (Canacope), Eduardo Contreras, the coronavirus crisis that Mexico is experiencing, where four deaths have already been recorded and 367 infected, will not be supported by entrepreneurs of micro and small businesses.

The leader of Canacope warned that the emergency in Mexico will cause the closure of at least 44,000 small and medium businesses in the CDMX, because they are not prepared for it.

He estimated that the absence of people and the temporary closure of some places could result in the loss of about 250,000 jobs.

«Small businesses usually live from day to day, for them the closure of a single day impacts them very strongly and this contingency is expected to last approximately one month, until April 20, and small and medium businesses are not prepared for such a long contingency,» Contreras said for Reforma newspaper.

He also noted that all types of businesses could suffer the impact that the epidemic will leave; however, those that are up to date in sales will be more affected, such as:

Stationery stores
Taxi drivers
Uniform shops
Cafeterias
Internet
Fondas
Stores

For example, an inexpensive store or kitchen that sold between 2,000 and 3,000 pesos a day, its sales plummeted to at least 300 pesos, which puts businesses in a serious situation.

«For the ambulance is expected to be worse, we have an active population of four million 84,000 people, of which 25% have an informal business and if in one day is not sold is difficult to recover, may be left in the lurch,» he also mentioned for the newspaper El Universal.

The suspension of classes also left several businesses with a sharp drop in sales, as they also live from day to day.

«Everything that has to do with hotels, airlines and buses will have a drop in sales of 70 to 80 percent. In addition, with the closure of cinemas, theaters, etc., it is expected that there may be a business closure of up to 10 percent in Mexico City, this corresponds to 44,000 shops,» he explained.

In the country’s capital there are about 444,000 businesses that have one to 10 workers and most are family, so for most it will be difficult to afford expenses ranging from electricity and water, to internet or rent.

Marco Antonio Buendía, president of the National Chamber of the Restaurant and Spicy Food Industry (Canirac), of the CDMX, warned that with the inactivity of between 10 and 12 weeks would be «finished with the industry», in addition to suppliers, because they are the ones who supply food like:

Tortillas
Soft drinks
Vegetables
Cleaning supplies
Table linen, among others.