With nearly 10 000 residents evacuated and homes, schools, structures, power and communication lines destroyed, and damage set to amount to over R4 billion, the implications are profound. The outlook for those who are both uninsured and poor is uncertain.
Retail Capital – a company that provides working capital to small businesses – dispatched a team to the fire stricken area last week to speak to business owners across an array of industries (FMCG, retail, hospitality, automotive and building) – providing the following statistics post their visit:
• 38-50% local consumers were uninsured leading to cash-flow issues – many were forced to take money from their businesses to fund much needed home repairs
• The evacuation and displacement of 10 000 residents has led to lower expenditure in stock by the retail and hospitality sectors, both needing to be prepared for the upcoming Oyster festival and year-end holiday rush
• Secondary damage from smoke or water has limited or eliminated trading whilst businesses wait for insurance assessments to be completed. This has led to low or no turnover as owners are unable to procure, order and pay for orders that are essential for high season preparation
• 2 500 job losses – mostly hospitality and domestic – have put further strain on economy with 765 people who filled in a survey saying that they needed relief aid.
• Water shortages due to drought and spraying of fires has put pressure on tourism – the “lifeblood of the town”. According to the Western Cape government, around 30 tourism establishments were affected by the fires. The subsequent loss of 300-400 beds – with only 4000 left available, has also had a negative effect on the economy.
• The boost in the construction industry – due to a rebuild of over 700 homes and repairs to even more – has put pressure on businesses needing emergency cash flow to fund the need for stock and short-term increases in deploying the services of artisans like plumbers, electricians, builders and bricklayers.
You can also read about it in this story that appears in Cape Times.