Coventry and Warwickshire’s economy won’t return to pre-Covid levels until at least 2023, according to one of the region’s business leaders.
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, believes that while the UK is on course for a slow u-shaped recovery because of the global impact, Coventry and Warwickshire will be one of the first regions to bounce back.
She made the prediction after the Chamber’s Quarterly Economic Survey (QES) for Q2 revealed record falls in the mood of businesses across the region, at the same time as the Office for National Statistics also revealed that more than 649,000 people had lost their jobs nationwide since lockdown began.
The QES, which is partnered by Prime Accountants and analysed by Warwickshire County Council, provides a barometer for the regional economy, with Warwickshire County Council’s analysis using a similar score to the national Markits Purchasing Managers Index (PMI) where 50 is the balance, and anything above means the majority feel positive and anything below means the reverse.
Using that format, the services and manufacturing sectors experienced the biggest drop on business confidence on record over the past three months.
The services sector saw business confidence drop from 71.1 to 38.4, while manufacturing fell from 57.4 to 39 – with significant drops across areas including orders, employment and cash flow.
The biggest drop was in the services sector, where the orders index fell from 59.6 to 14 during Q2 as the effects of the pandemic took hold.
Louise said: “It’s important during times of uncertainty and hardship that we look to learn lessons – and for me it is that cash is king and confidence is critical.
“That’s why we need both business and consumer confidence stimulating by the government not just now, but in the long-term because I believe this recovery is going to take several years because of the global impact.
“The more resilient firms are the ones that are importing and exporting as they have broader client bases, and will be a key avenue for any business wanting to survive in the future – as a region the West Midlands is already the largest importer and exporter region outside of the south.
“I’m confident that the West Midlands will emerge from this crisis quicker than other regions as it has numerous windows of opportunity coming up. Coventry is UK City of Culture next year, we have the Commonwealth Games in 2022, and we are already reaping the benefits from a £3.2 billion package from the government with support from Andy Street.
“Now more than ever we will be ensuring the voices of the businesses we represent are heard in government.
“While the Chancellor’s £300 billion package of support is welcomed, it’s likely that tax rises will be inevitable in the future, and we will be making it clear that the burden to repay this cannot always fall on the shoulders of businesses who, after all, are the wealth creators.”
Steve Harcourt, Director at Prime Accountants Group, said: “The government should be applauded for their efforts to support businesses and workers so far, but there is going to be a need to offer some sectors more long-term and tailored support – something that was not addressed in the Summer Statement.
“Hospitality and tourism have been one of the hardest hit sectors, and many hotels and venues are still waiting for clarity on when events can resume. When you consider they are also fighting a battle to try and instil confidence in consumers to dine out, then there is a real need here for the furlough scheme to be extended further to prevent more redundancies.
“Retail and aviation, for example, are other sectors that have been massively impacted and will also need longer-term support to not only avoid making further redundancies, but to survive.”