Industries in which Activity was Severely Adversely Impacted by the COVID-19 Pandemic
Main points from the box:
- The negative impact on economic activity was focused on a small group of “proximity industries”—those in which the regular manner of their activity incorporated a high potential for infection during the pandemic, due to, for example, border crossings, prolonged proximity between people, or many people being in an enclosed space. Prior to the crisis, this group encompassed approximately 30 percent of employment and 20 percent of the output in the economy.
- The adverse impact on the activity of the “proximity industries” on the eve of the second lockdown was about 21 percent in terms of revenue and about 14 percent in terms of employment. The adverse impact on other industries prior to the second lockdown was near zero in terms of revenue and about 7 percent in terms of employment. During the lockdowns, the negative impact on activity in the proximity industries was markedly more severe than for other industries.
- The proximity industries are not industries that in any case would have contracted. On the contrary, even though in recent years the growth rate of their labor productivity was low, the demand for their products, and primarily their demand for workers, increased and contributed to the growth of the economy. This finding emphasizes the importance of maintaining the survivability of the companies in these industries during the crisis through government assistance.