According to a survey by the Algarve Region Trade and Services Association (ACRAL), of the members who responded to the survey with the theme "Impact on the local economy: effects caused by Covid-19", the majority (92 percent) have micro-businesses with "less than 10 workers" and 66.7 percent belong to commerce.
"If by chance, the summer of 2021 is the same or worse than the summer of 2020, the winter season could be extremely dramatic for the future of the sustainability of Algarve businesses," ACRAL president Paulo Alentejano warned, quoted in a statement from the association.
The same source asked the Government to adopt "different measures" that can "guarantee the survival of the Algarve's business fabric and avoid a social crisis in the Algarve", a region that has been heavily affected by restrictions on tourism.
"Faced with the current situation, 88 percent of businesses responded that they have been seriously affected with accumulated losses in recent months", ACRAL quantified, stressing that the assessment made of the current situation is "very bad" and "70 percent of respondents" felt "in 2021 the situation will worsen".
ACRAL pointed out as one of the reasons for the lack of confidence of these entrepreneurs "the sharp drop in revenues" due to the "low demand for products and services after lockdown" caused by the "drastic" drop in demand.
"In accordance with the data obtained from the aforementioned survey, it is concluded that 66.7 percent of respondents correspond to companies of which trade is the main activity, 16 percent relate to services and 16 percent to hotels and restaurants" reported the Algarve business association.
As for expectations for the next 12 months, "72 percent of respondents do not foresee any kind of improvement" and therefore had to control costs, postpone or cancel investments or lay off workers, a situation that implied an "increase in the redundancy rate" and unemployment in the region.
"Regarding the restrictions decreed by the Government, 97 percent of those polled agree with the measures imposed on health, however, their establishments have been seriously damaged by the restrictions applied in their sectors of activity and, despite a large percentage having knowledge of the support made available by the Government, and having signed up for it, 94 percent consider that State support does not correspond to their needs", ACRAL also said.
These businessmen criticised the "lots of bureaucracy" imposed on access to state support for the economic activities most affected by the Covid-19 pandemic, and showed "enormous concern" for the end of credit moratoria.
"The Algarve is heavily dependent on the tourism sector, with 73 percent of respondents estimating that this year's summer will be the same or worse than last year's summer. Algarve business owners are fearful and very uncertain about the future ahead and around 68 percent expect the economy will not recover before 2023," ACRAL noted.
For this reason, ACRAL has also asked municipalities to create local support offices for business owners, made up of "specialised multidisciplinary teams" to provide support "at the financial, banking, accounting and legal levels".
The aim is to guide entrepreneurs regarding "incentives, applications and available support", as has already been created in Faro under the name "SOS Empresas Office".