Business Uncertainty during the Covid-19 Pandemic: Assessment Based on the Pandemic Fear Index and Economic Surveys

Purpose: The article presents an assessment of the situation of business enterprises during the COVID-19 pandemic. Design/Methodology/Approach: The analysis uses the Pandemic Fear Index (PFI) and more detailed analyses based on Business Tendency Surveys (BTS). The proposed PFI considers critical factors in a pandemic, such as reported cases of illness and death and government actions that restrict business operations. Findings: The study indicates a clear differentiation of the situation among businesses depending on the nature of the business activity. The changes in the PFI index turned out to be like the changes observed in the BTS in individual sectors of the economy. An exceptionally high correlation was found between the indicator and the results of the “pandemic module” of the BTS. Practical Implications: The analysis uses data from the Polish economy, but the proposed methodology of identifying and assessing the impact of a pandemic on the economy may be used in other countries, depending on data availability. A broader application of the presented approaches considering pandemic shock may be one of the directions for further research in the future. Originality/Value: The PFI, specially designed for the pandemic period, is a proxy for assessing business uncertainty during a pandemic. The advantage of the indicator is the ability to observe the daily changes of its value along with any incoming information. The added value of applying the proposed methods is the possibility of a detailed analysis of the occurrence of subsequent pandemic waves and the emerging discrepancies in the shaping of uncertainties that appear during the pandemic in individual sectors of the economy.