Despite the Government announcing a raft of measure to support businesses, a new survey shows the devastating effects of the coronavirus lockdown on North West firms. Tony McDonough reports
Business confidence in the North West plummeted in April as the full impact of the coronavirus shutdown became apparent.
Despite the Government announcing a raft of measure to support businesses, the latest Business Barometer from Lloyds Bank Commercial Banking reveals confidence fell by 44 points during this month to -35%.
Companies in the North West reported lower confidence in their business prospects month-on-month at -28%. When taken alongside their views of the economy overall, this gives a headline confidence reading of -35%.
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The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide. In an illustration of the impact of COVID-19 on the region’s business, the majority of firms reported a significant decrease in demand for their goods and services, with 78% seeing demand fall in April compared to 7% who saw it rise.
Almost half (49%) of businesses in the region were operating below 50% capacity, while 32% of reported operating above this level. Nearly a fifth (17%) of firms weren’t operating at all.
Of the 80% of businesses that reported disruption to their supply chain during April, 32% expected the situation to improve within three months, while 10% expected it would take more than 12 months to return to normal levels.
Glenn Bemment, regional director for the North West at Lloyds Bank Commercial Banking, said: “It’s not surprising that confidence in the North West has fallen this month, with some of the region’s key sectors being hit the hard by measures to tackle the pandemic.
“Manufacturing, tourism and hospitality have all borne the brunt of lockdown and we fully understand how difficult this situation is for business owners.”
Across the UK, overall confidence fell 38 points to -32% as firms’ optimism in the economy and confidence in their own prospects dropped sharply. Wales reported the lowest confidence at -52%.
In April, overall business confidence fell across all four sectors. Confidence in the manufacturing sector saw the sharpest decline, falling 46 percentage points to -35%, with the retail sector falling to -33%. The construction sector fell by 34 percentage points to -20%, while services fell 23 points to -22%.