They collected a sample of the balance sheets of the largest companies throughout the region and found that investment fell sharply, while debt levels remain high, particularly in the most affected sectors by the COVID-19 pandemic. Also, the demand for formal workers had a great fall and informal employment increased significantly during the recovery.
The report analyzes companies from a wide range of economic sectors in South America. Although the income of companies in sectors such as logging, mining and other extractive industries has mostly recovered, in many sectors (such as construction, retail and most non-manual professions) the gaining remained very low.
Small businesses, which often have limited access to credit, were tho ones that most suffered the crisis. The report says that smaller companies continue to face more financial problems and are more likely to fall behind on debt payments, which is why a significant part closes. To reverse the situation and prevent it from leading to a kind of "long-lasting economic Covid", where a weak private sector fails to create jobs or stimulate economic growth, the different governments in the region should take action and implement a series of policies to help companies boost investment and hire new employees.
These are some of the main conclusions of the new report, which analyzed the how the different companies developed or grew based on how big the businesses were in 2020 and 2021, the capital levels of companies are still 20% lower than before the pandemic.
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