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84 per cent of South West businesses unable to cope if coronavirus crisis lasts six months
The stark reality facing businesses grappling with the coronavirus crisis has been set out in a new report.
Some 84 per cent of companies across the South West have said they will be unable to cope if the lockdown measures continue for six months, with only 16 per cent stating they will be OK, according to a study by Business West.
The survey of more than 1,100 businesses across the region highlights a number of concerns about current and future financial positions, while confidence in their ability to survive drops significantly the longer the restrictions are in place.
More than 91 per cent of respondents felt their businesses would survive a month-long lockdown but this dropped to just over 16 per cent if the measures continue for six months.
James Durie says this crisis is worse than any recession in memory. Photo courtesy of Business West
Commenting on the findings, James Durie, chief executive of Bristol Chamber & Initiative at Business West, said: “Our survey spells out just how hard many firms are being hit – the impact of the coronavirus is far worse than the financial crisis of 2008 or any recession we can remember. These are critical weeks for the economy and for the fate of many firms. We are hearing from the coalface stories of firms, built up by individuals over decades, now looking into the abyss.
“We found plunging confidence in businesses’ belief in their ability to survive over a more prolonged period, particularly among small firms. This is a stark reminder of the potential depth of this crisis, with the damage to business risking being cumulatively greater the longer the crisis continues.
“Any exit plan from the current lockdown must be led by the science and by the need to save lives. However, our findings suggest that uncertainty and lack of clarity from government may be exacerbating a crisis in confidence in small companies’ view of the future.”
The study, which was conducted between April 2 and 17, reveals that small firms are reporting a worse financial impact and greater pessimism about the future than larger companies.
It also found that 37 per cent of all firms said they would be taking or considering other measures to reduce labour costs, whether through reduced working hours or salaries, cutting back on contracted workers, voluntary unpaid leave or redundancies.
Durie says the Government needs to act now to ensure major damage to the labour market is only temporary.
Lucy Bristow says some employers are getting no support from the Government. Photo from Lucy Bristow website
Lucy Bristow, the managing director of recruitment consultants Lucy Bristow Appointments Ltd based in Frampton Cotterell, said the Government needs to differentiate dividends from employment.
“A lot of people in my position are employing people,” she explains.
“They have got to furlough their staff which is fine, and they are very grateful to the Government for their help on that basis. But when it comes to themselves, they are getting nothing at all. So, they are trying to keep their businesses afloat with no Government support.
“It is all very well furloughing their staff but there won’t be a business to come back to at the point when this crisis is over if the Government don’t support the businesses. It just seems very unfair. I have run my business through two major recessions and had 15 staff at the time. We have managed to survive all of that but nobody could have predicted this.”
Main photo by Joab Smith
Read more: How the COVID-19 lockdown will change the high street
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