1.6 million businesses close in Mexico due to the pandemic and lack of government support.

Close-up on a red sign in a window written inside in English "Out of business".

Nationally, for every 100 people employed in 2019, 20 people stopped working because of establishments that died in 2020. In 2021, the proportion increased to 27 people.

(Mexico – INEGI) – In Mexico, the final closure of one million 583 thousand 930 businesses of various sizes was recorded between May 2019 to July 2021. This is due to the impact on the economy of the covid-19 pandemic, according to the latest Business Demographics Study 2021 (EDN 2021), published by the National Institute of Statistics and Geography (Inegi). To this must be added the null support from the Federal government to the country’s businesses. 

“The health emergency derived from the covid-19 pandemic led businesses to pause their activities or even close down permanently,” the report explained. The institute refers to the 4.9 million establishments registered in the latest demographics study. Between May 2019 to September 2020, 1,10,857 economic units closed, and 619,443 were born, but between May 2019 to July 2021, 1.2 million were born, and around 1.6 million died. 

Nationally, for every 100 people employed in 2019, 20 people stopped working because of establishments that died in 2020. In 2021, the proportion increased to 27 people. Regarding the death of establishments, Quintana Roo remained the entity with the highest proportion of businesses that closed for good, with 31.88 percent in 2020 and 46.59 percent in 2021. 

Oaxaca and Chiapas registered the lowest proportion of closures, with 13.7 percent in 2020 and 26.34 percent in 2021, respectively. The states with the highest proportion of personnel employed in new establishments were Hidalgo (27.56 percent), Tlaxcala (27.23), and Puebla (26.15). 

The states with the lowest proportion of personnel employed in nascent firms were Coahuila (8.57 percent), Quintana Roo (8.46), and Nuevo León (6.65) in 2021. The 2019 economic censuses show that 99.8 percent of the country’s establishments are micro, small, or medium-sized. Due to their characteristics, these economic units tend to present more significant changes than large companies.

 

The Yucatan Times
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