Impact of COVID-19 pandemic on small and medium enterprises within the construction industry in KwaZulu-Natal Province, South Africa

Abstract

Globally, small and medium enterprises contribute to alleviating poverty, inequality, and unemployment in the society. However, the COVID-19 pandemic has exacerbated the challenges faced by these firms as the pandemic is having a devastating impact on their survival and operations. Against this backdrop, this study investigated the impact of the COVID-19 pandemic on small and medium enterprises within the construction and engineering industries in KwaZuluNatal province, South Africa. The mixed-methods research was conducted to help validate the findings. The data was collected from 355 respondents, including employees, managers and SME owners. Data was collected using questionnaires and interviews. The qualitative data was analysed with the help of the NVivo, latest version 13. On the other hand, the quantitative data was analysed using Statistical Package for the Social Sciences (SPSS), latest version 26.0. The quantitative results a strong positive relationship between COVID-19 and the financial performance of small and medium enterprises. On the other hand, the qualitative findings indicated that pandemic and subsequent lockdowns resulted in revenue loss, limited spare financial resources, lack of cash reserves, financial distress, limited access to bank loan/credit, negative growth sales, loss of sales, and reduction in cash flow. Moreover, the results of the quantitative study a strong positive relationship between COVID-19 and small and medium enterprises productivity. The qualitative findings also established that the pandemic negatively affected the productivity of small and medium enterprises as a result of disruption of the global supply chain, reduction in production, decrease in production inputs, decrease in capacity use, restriction in the shipment of goods, decrease in business operations and unavailability of raw materials.