The SCR Chambers: East Midlands
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Chamber survey shows the full impact of Covid-19 on businesses
Business performance in Derbyshire, Nottinghamshire and Leicestershire took an unprecedented hit in the second three months of the year as the coronavirus pandemic sent shockwaves through the region’s economy. New figures released by East Midlands Chamber highlight the extent to which the Covid-19 crisis affected local firms in the second quarter of the year. The Chamber’s Quarterly Economic Survey for
Q2 2020, found that a net 67% of firms reported a decline in UK sales in the three months to June, while a net 50% saw a fall in export sales. Order books also took a hit, with a net 55% reporting a fall in UK orders for Q3, while for exporters, the fall was a net 46%. In terms of staffing levels, 36% of survey
respondents said they had reduced their headcount in Q2, with only four per cent increasing their workforce numbers. And with the Coronavirus Job Retention Scheme starting to phase out in Q3, a further 34% anticipate more staff reductions in the coming three months. All other key indicators which the survey
measures were down significantly when compared to Q1. The Chamber models the survey data across a
range of key performance indicators, including sales and orders, recruitment, cashflow, investment intentions and confidence, to produce a quarterly ‘State of the Economy
Index’, which enables it to compare local business performance quarter-by-quarter. In Q2, the score fell to -411, its lowest level on
record and the first time it’s fallen into negative territory. It is the mirror opposite of the peak of +411 that it reached in Q2 2014. There was, however, some
reason for optimism. Firms were asked a series of questions in the survey about how they view their post-coronavirus prospects, with one in five responding that they anticipated their business to return to 100% or more of its pre- lockdown activity levels by the end of the year. A further 45% said they would achieve this by the end of 2021. To help them do so, 36% said they would
‘For most
businesses, this period has been defined by uncertainty’
“The speed at which the economy shut down because of the pandemic and the resulting lockdown was unprecedented. Whole swathes of the business community either ceased or dramatically reduced activity, with some yet to get back underway. “For most businesses, this period has been defined by uncertainty and a wait for much-needed clarity about how and when the economy may unlock and any further health implications this may have. The key thing many businesses need right now is focused support to assist in the transition of their staff out of
furlough and back into the workplace
actively look to invest in activity that would help to diversify their offer to access new markets, while 25% said they would invest further in staff training to improve efficiencies. Chamber Chief Executive Scott Knowles said:
“Although national figures published over the past few weeks have given a broad overview of what has happened to the economy in general, the findings of our survey provide the first real, tangible evidence of the impact that Covid-19 has had on businesses across Derbyshire, Nottinghamshire and Leicestershire.
and to adapt their operations, to help them return to pre-lockdown levels of economic performance as quickly as possible. “Clearly, there’s a long way to go before the
economy can fully recover. However, regardless of the individual experiences of businesses over the past three months, many see opportunities to grow and succeed outside of this current period, perhaps taking a different approach. “To help them in this, continuing to support
businesses to innovate, diversify, enhance their resilience and think differently must become a central focus of the Government’s policy response as we come out of the pandemic.”
500 400 300 200 100 0
-100
-200 -300 -400 -500
389 411 379 276 248 377 386 383
STATE OF THE ECONOMY INDEX 392
375 279 238 204 293 320 215 375 360 355
362
290 254 174 199 Q1 Q2 Q3 Q4 Q1 2014 2014 2014 2014 2015 Q2 2015 Q3 2015 Q4 2015 Q1 Q2 Q3 Q4 Q1 2016 2016 2016 2016 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 Q2 Q3 Q4 Q1 Q2 2019 2019 2019 2019 2020 2020 241
-411
40 CHAMBERconnect Summer 2020
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