Euro zone companies see productivity boost from pandemic - ECB survey

FRANKFURT (Reuters) - Euro zone companies expect to emerge more efficient from the coronavirus pandemic thanks to greater use of digital technologies and remote working, a European Central Bank survey showed on Monday.

FILE PHOTO: Office buildings are seen at the financial and business district of La Defense, amid the outbreak of the coronavirus disease (COVID-19), in Paris, France, November 9, 2020. REUTERS/Benoit Tessier

The COVID-19 outbreak has caused the largest economic contraction in centuries, but it might turn out to have a silver lining for firms in the long run by forcing them to modernise their business and become more adaptive.

The ECB asked 72 industrial and services firms about the long-term impact of the pandemic on the way they operate and the environment around them.

It found firms expected home office, virtual meetings and greater digitalisation to remain part of their daily life even after the pandemic, along with reduced demand.

“To a large extent, this seems to reflect a view that some changes in living and working habits brought about by the pandemic, especially the increased conduct of business and consumption online and a consequent reduction in travel, will become embedded,” the ECB wrote in an article accompanying the survey’s results.

Graphic: Main long-term effects of the pandemic reported by leading companies -

These changes were seen helping boost productivity and reduce headcount.

“This would seem to reflect how businesses have learned to maintain production in spite of restrictions on labour inputs due to social distancing and the identification of related efficiency gains,” the ECB said.

Germany was one of several euro zone countries set to extend a national lockdown this month to curb coronavirus infection rates that are still running high.

Graphic: How respondents saw the long-term effect of the pandemic on business aggregates -

More than three-quarters of respondents in the ECB’s survey said that their business would be more efficient and more resilient after the pandemic.

By contrast, some ideas that emerged in the early part of the outbreak, such as expectations that companies will internalise or localise part of their supply chain, had fallen out of favour.

Graphic: Testing narratives in relation to the long-term effects of the pandemic -

Reporting by Francesco Canepa; Editing by Balazs Koranyi and Hugh Lawson