Business survey struggles to find positives across South West
By Rob Freeman | 13th August 2020
Less than one in 10 businesses across the South West are feeling positive following the impact of the coronavirus pandemic, according to new research.
And the second Business West survey on the impact of COVID-19 revealed only six per cent said the Chancellor's £1,000 job retention bonus would have a major impact on whether they retained furloughed workers.
Of the 519 businesses, 76 per cent said their experience of the pandemic had been negative or extremely negative with only nine per cent describing the impact as positive or extremely positive.
Business West managing director Phil Smith said: "With so much public discourse focused on the shape of the recovery - with U, V, L and many other letters to choose - this survey offers real insight into how our region is affected by, and recovering from, the most significant economic shock in modern times.
"Unfortunately for the business health of our region, all our results point to a longer-term negative impact of COVID-19.
"The financial health of our region's business community is vital to our area recovering and thriving, yet COVID-19 impacts cannot be overstated."
The Coronavirus Job Retention Scheme was described as essential by 41 per cent with 66 per cent saying it was useful, important or essential.
Further findings about the scheme revealed:
- 38 per cent of businesses furloughed at least three quarters of their staff.
- 35 per cent of employers did not use the scheme.
- 65 per cent expect redundancies to impact less than a quarter of furloughed staff.
- 68 per cent did not expect to make any furloughed staff redundant.
One in five remained unsure of redundancy plans with 27 per cent already making difficult decisions in relation to their staff.
Of those making redundancies, 43 per cent have already made those posts redundant with the same number making redundancies by the end of October.
Employers have reduced labour costs, 49 per cent cutting paid working hours while 23 per cent on looking at unpaid leave and 32 per cent reducing employee salaries.
By contrast, 17 per cent have taken on additional staff since lockdown with most businesses anticipating a return to pre-pandemic levels of activity next summer
Unsurprisingly, 44 per cent of businesses have concerns about their financial position - rising to 75 per cent in the future.
That is moderately less gloomy than the 62 per cent and 88 per cent answers to the same question four months ago.
Perhaps the most dramatic impacts has been on profitability where 61 per cent reported a decrease and 50 per cent a fall in cash reserves as liabilities, including loans, increased for 28 per cent of respondents.
While 24 per cent anticipate the recovery taking more than 12 months, 15 per cent do not anticipate recovering to their pre-pandemic level and eight per cent are concerned about their ability to survive.
Businesses say home working is likely to be a key trend with 51 per cent planning a greater use for at least part of their workforce and 64 per cent increasing use of video conferencing to save travel budgets.
Among the findings of the survey:
- 60 per cent said there would be no change in their business premises requirements.
- 17 per cent anticipate needing less workspace because of increased remote work.
- Only six per cent were planning on closing their premises with a wholesale move to remote working.
- 54 per cent were focused on increasing uptake of cycling and 39 per cent increasing the use of electric bikes and scooters.
- 34 per cent were investing in supporting infrastructure to help securely store bikes and install electric charging points.
Mr Smith said: "Our survey shows business confidence has been badly damaged and there is reduced capacity to invest and grow out there.
"Fresh support is therefore required to restore business confidence and return businesses to growth, attesting the decline of recent months.
"The wider speed at which the economy and individual business income recovers will also be critical to levels of unemployment and underemployment moving forward."
He continued: "Our survey suggests that, other than the devastating personal impact of redundancy, some of the actions taken by businesses will be short term with no longer lasting implications for workers in the region.
"However, salary cuts, and a move to more use of part-time and home-based working based suggest a longer-term trend.
"Household purchasing power and confidence has suffered more of a decline than just the jump in the claimant count suggests, significantly hampering the chances of a consumer-led recovery in our region.
"One upside of coronavirus is the potential long-term benefits of home working and other behavioural changes on air quality in our region, however, the implications for commercial office space remain unclear."
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