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Pros and cons of coronavirus crisis for Catalan business

While outbreak is affecting certain exports to China, companies in Catalonia are also benefiting as producers turn to European markets

 

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05 March 2020 12:10 PM

by

ACN | Barcelona

As coronavirus continues to spread around the world, how the Covid-19 crisis might affect the economy and business becomes an increasingly relevant question.

Just this week, the European Central Bank announced that it is preparing for the possibility of offering loans to companies seriously affected by the outbreak.

That includes Catalan firms, and on Wednesday at a congress in Lleida, Spain's association of pork producers, Anprogapor, warned that the crisis in China is affecting exports.

According to Anprogapor, the main problem is the build-up of containers at Chinese ports, as well as the transport restrictions imposed in certain areas of the Asian country.

Transport times have gone up 30%, says the association, which adds that a lack of available containers in Chinese ports has driven up rental costs that are affecting profit margins.

Catalan economy likely to be hit hardest

Catalonia's largest business association, Foment del Treball, says the crisis could affect GDP in Spain by two decimal points, with the Catalan economy hit hardest.

That is because industry and tourism are particularly strong in Catalonia, and these are two sectors most affected by the outbreak, along with it being a popular venue for congresses.

An example is the cancelation of the Mobile World Congress over fears about coronavirus, which the government says was a major cause for last month's rise in unemployment.

Among the measures the authorities are considering to help firms survive the crisis is exempting businesses forced to halt production due to the virus from paying social security.

Taking advantage of Asian supply problems

However, some Catalan firms appear to be benefiting from the coronavirus crisis precisely because of the problems suppliers are encountering in the Asian market.

The Chamber of Commerce said on Wednesday that above all firms in the textile, pharmaceutic, and capital goods sectors are seeing more orders than usual.

South American companies that normally import from Asia, for example, are turning to European suppliers, including Catalan firms, to fill the shortfall caused by the crisis.

"We have to take advantage of the opportunity for our industry," said Chamber head Joan Canadell, who added: "It's the positive side of this misfortune that is the coronavirus effect."

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  • Image of Tarragona port with vehicles and a chemical industrial estate in December 2019 (by Núria Torres)

  • Image of Tarragona port with vehicles and a chemical industrial estate in December 2019 (by Núria Torres)

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