ERMG business survey indicators point to a sustained yet slow recovery of the Belgian economy

Brussels, June 2020 – This week, Belgian firms that took part in the ERMG survey reported a 23 % drop in turnover compared to pre-crisis levels – an improvement of 3 percentage points on the previous survey. The indicators which track the risk of bankruptcy, liquidity problems, employment, investment and companies’ degree of concern also display a relative improvement this week, but they are still at a worrying level. These are the main findings of the ERMG (Economic Risk Management Group) survey carried out last week. Most companies state they have not adjusted sales prices nor does the crisis appear to have had an overall impact on average sales prices, although these have gone up in some branches of activities, such as the trade sector.

For the ninth time since the end of March, a survey was conducted last week by a number of federations of enterprises and the self-employed (BECI, NSZ/SNI, UNIZO, UWE and VOKA for this latest survey). The aim of the initiative, which is coordinated by the NBB and the VBO/FEB, is to assess the impact of the coronavirus crisis on economic activity in Belgium as well as companies’ financial health and decision-making. In total, 2 365 firms and self-employed people responded to the ninth survey[1].


[1] Participation in the survey by some federations whose members operate in a specific sector of activity may lead to a sampling error. In particular, companies from one by branch of activity could be more strongly represented in our sample than in the Belgian economy as a whole. The sample is therefore stratified by industry based on the weight in value added in Belgium. Note that the changes over the weeks should be interpreted with caution, as the companies that reply to the survey are not necessarily the same each week.

Company turnover is picking up, particularly in the hardest-hit sectors

Taking into account company size and the added value of different industries, surveyed businesses reported a dip in turnover of 23 % this week in comparison to pre-coronavirus levels. This is a marked improvement on the last two survey rounds; over a period of four weeks, there has been an increase of 8 percentage points.

The improvement is quite widespread with almost all sectors reporting an upswing in turnover in comparison to the average for the eight previous surveys. Turnover has improved most significantly in those sectors that were initially hit hardest by the crisis: the arts, entertainment and recreation sector, catering and accommodation, non-food retail sales, wholesale, construction and the real estate activities sector. In most sectors in which the crisis’ initial impact was less pronounced, there are minor improvements, although turnover decreased in the information and communication sector and among retail food sellers.

This week’s survey was held immediately after the ban on certain economic activities was lifted in the catering and accommodation and arts, entertainment and recreation sectors, on the strict condition that the health precautionary measures are followed. Although the restrictions have been lifted for only part of the activities in these sectors and not all companies reopened from day one, average turnover in the catering and accommodation and arts, entertainment and recreation sectors has clearly improved. This week, both sectors reported turnover contractions of 75 % and 63 %, respectively, compared with an average of 89 % and 86 % recorded in previous surveys. Both sectors remain in dire straits, although matters are slowly improving as certain activities are being resumed.


The other indicators have improved this week as well, but they are still at a worrying level

This week, companies also reported an improvement in the other indicators analysed by the survey: the risk of bankruptcy, liquidity problems, employment, firms’ degree of concern and postponement of investment.

Perception of the risk of bankruptcy improved: among those surveyed, the share of firms deeming bankruptcy ‘likely’ or ‘very likely’ dropped to 6 % this week, compared to an average of 8 % in previous surveys. Liquidity problems too are now less severe: 72 % of respondents cite zero liquidity problems, in comparison with an average of 67 % during May’s surveys and 58 % in April. Of those who responded, 77 % say they would be able to maintain their liquidity position for at least three months under the current circumstances; in May and April, that figure was 73 % and 63 %, respectively.

Employment indicators have also improved since the last survey: the share of temporarily laid-off workers has declined and firms are reporting greater optimism about employment expectations. More precisely, companies surveyed report 14 % of staff currently temporarily laid off, compared with 18 % two weeks ago, 22 % four weeks ago and 30 % in late April. As for employment expectations, a significant decline in employment is still expected towards the end of the year, but there are signs that more companies in certain sectors, including the business services, are planning to hire new staff. This could lead to a reduction in net job losses if the employees in question are able to switch from one job to another.


The degree of concern reported by firms, measured on a scale of 1 (unconcerned) to 10 (very concerned), is in line with the other variables, as the indicator has fallen for the fourth consecutive week, from 7.1 at the end of April to 6.3 this week. The fact that companies are feeling less concerned could have a positive impact on their investment. During the fifth round of the survey at the end of April, respondents were asked about postponement of investment; the same question was repeated this week. It turns out almost one in every two firms want to postpone investment. This is an improvement, however, as the corresponding figure in late April was 62 %. Moreover, the share of respondents planning to postpone investment to an unspecified point in time fell from 34 % to 20 % over the same period of time. This week’s survey also contained another, more quantitative question, to assess the impact of the coronavirus crisis on investment levels. On an aggregate level, companies with investment plans report a 32 % decline in investment compared to pre-crisis times. On top of that, the coronavirus crisis has had a negative impact on business investment in all sectors.

Once again, the situation remains critical in the catering and accommodation and arts, entertainment and recreation sectors, despite a drop in temporary lay-off figures for the former, and a slight rise in turnover in both[2]. More than one in five surveyed businesses in these sectors still consider bankruptcy to be ‘likely’ or ‘very likely’, with more than one in five jobs in danger. In both sectors, companies that responded to the survey also report a massive drop in investment compared to the situation before the crisis: for the catering and accommodation sector, the decline is 66 %; for the arts, entertainment and recreation sector, it is 82 %.

At the moment, the crisis is not affecting average sales prices, although they have gone up in certain industries, such as the trade sector and catering and accommodation

This week’s survey looked into changes in sales prices[3]. Almost seven out of ten companies that took part in the survey indicate prices have not changed as a result of the coronavirus crisis. In fact, the percentage of surveyed companies that noted an increase is about the same as the percentage that witnessed a decrease, with both boxes ticked by 16 % of respondents. The average effect of the crisis on sales prices is about zero.

Still, there are important differences between sectors. In particular, 36 % of surveyed companies in the retail food sales sector report an increase in sales prices; a mere 4 % have witnessed a decline, meaning the average increase in prices for this sector is estimated to be 1.8 %. A similar imbalance can be found in wholesale and catering and accommodation. In the real estate activities and transport and storage sectors, on the other hand, the percentage of businesses reporting a decline in sales prices is higher than the percentage reporting an increase. It is worth mentioning that the price drop reported by the real estate sector should not be equated with falling house-sale prices. Prices for estate agents’ services and property prices are two separate concepts; the survey does not poll respondents about the latter.


[2] According to this week’s survey, the share of temporarily laid-off catering and accommodation workers has gone down from 89 % two weeks ago to 48 % this week. For the arts, entertainment and recreation sector, the figure remains stable at approximately 80 %.

[3] It is worth noting that the survey’s assessment of sales prices differs from the consumer prices. This is because surveyed companies’ sales prices also include B2B prices (trade among companies themselves) and the survey neither takes into account foreign companies’ prices nor the weight of the goods and services in the household consumption basket.