Figures released today (Wednesday, July 1) from Lincolnshire Chamber of Commerce’s quarterly economic survey signify the extent to which the pandemic has affected local businesses.
The survey for Q2 2020 found that businesses reported a decline in UK sales activity, from a balance of +8 to -53 (noting here that a balance above 0 signifies growth with negative balances indicating a contraction in activity), while a fall in overseas sales was reported from +4 to -50.
Orders also took a hit with UK orders falling from +6 to -48 and for exporters the decline reported was from 0 to -37.
Staffing levels have undoubtedly seen a similar decline, with recruitment activity over the last three months fallen from +12 to -26.
The Coronavirus Job Retention Scheme (CRJS) has been the lifeline of businesses across Lincolnshire and beyond, however with the phasing out of the scheme in Q3, the survey shows that businesses are expecting to make more reductions in staff in the coming three months.
All other key indicators were understandably down compared with Q1, the only real positive we have seen is the decrease in price pressures from falls in demand and supply, and oil prices.
Responses this quarter have split quite neatly 75%/25% across the Services and Manufacturing sectors, with results overall showing a greater impact on activity for services.
Looking ahead, unsurprisingly confidence levels have reduced drastically with future profitability levels dropping from +18 to -39 and turnover is at -28 from +38 in Q1, with these shifts in confidence being much more pronounced in the Services sector.
Simon Beardsley, Chief Executive of Lincolnshire Chamber of Commerce, said: “These results have come as no surprise, although national figures published over
the last few weeks have shown what has happened to the economy generally, these findings give the first comparison and evidence of the impact that the pandemic has had on businesses across Lincolnshire.
“It is and has been an unprecedented situation in both scale and impact, businesses across Lincolnshire stopped or dramatically reduced their activity, with some still waiting for the go ahead to reopen.
“We know there is a long way to go before the economy can fully recover from the impact of the pandemic, but what businesses need now is some focussed support to aid their staff back into the workplace, adapting operations and returning to pre-lockdown business activity and economic performance.
“It is important we now look to the future, notice the opportunities to grow and thrive in the new normal, adapting and streamlining processes and procedures, taking a different approach to how we do things, meaning supporting businesses to innovate, build their resilience and aiding that growth mindset must be seen as a central focus of the Government’s policy response as we start to navigate the new normal.”
Councillor Colin Davie, executive councillor for economy and place at Lincolnshire County Council, said: “Covid-19 has had a significant impact on the economy and on growth locally, just as it has nationally.
“We have done a great deal to help. The services that we commission have provided one-to-one advice to around 600 businesses.
“Now, as we enter the next phase of more business re-opening in rapidly changing circumstances, support continues to be available focused on the particular challenges that different sectors are facing.
“The coming months will undoubtedly remain challenging, so our focus is on helping businesses become as resilient as possible for the future.”
Hear what these results mean for local businesses at our Q2 Quarterly Economic Briefing.