Don’t abandon us just yet say firms still relying on government Covid19 support schemes

Business graph

Firms across the UK are still relying heavily on government support schemes to help stem cashflow issues, according to the British Chamber of Commerce’s latest tracker survey.

The survey revealed that 38 per cent of firms reported improved revenue from UK customers but more than one in three businesses say they have three months or less worth of cash in reserve.

While business conditions have improved moderately over the last few weeks, the same percentage (38 per cent) of firms say that business is decreasing.

The leading business organisation’s tracker survey, which serves as a barometer of  the pandemic’s impact on businesses and the effectiveness of government support measures, received 502 responses during the week from 3rd to 7th August and is the largest independent survey of its kind in the UK.

The unprecedented decline in business conditions seen during the second quarter is now levelling off, but firms still face difficult trading conditions.

Louise Bennett, CEO of the Coventry and Warwickshire Chamber of Commerce, said: “Business-to-consumer companies are more likely to have noticed a pick up but that is after being fully locked down so they have experienced some pent-up consumer demand

“Again, the report points to rocky times ahead as the Government’s business measures start to tail off, and the picture is extremely testing for large parts of our economy – and that is before taking into account any local lockdowns which might occur.”

A smaller proportion of firms (22 per cent)are reporting a rise in revenue from overseas customers than from UK customers (38 per cent) amid continued disruption to global commerce and trade flows.

Of those reporting an increase in their cash reserves, a significant number of businesses cited government support schemes as a driver of this, with the number of firms using the furlough scheme (34 per cent) and the various loan schemes (30 per cent) and grant schemes (16 per cent) still significant. 68 per cent of firms mentioned new business or customer demand as a factor.

British Chamber of Commerce Director, Adam Marshall,  said: “While some firms are seeing improvements in trading conditions, we are still very much in the eye of the storm, with further turbulence ahead.“As the government’s emergency measures begin to wind down over the coming weeks, and with the prospect of further local lockdowns still very real, businesses across the UK are going to need further support to weather uncertainty over the coming months.“Slashing the jobs tax by taking steps to reduce the burden of employers’ National Insurance contributions, big new incentives for business investment, and targeted support to help businesses placed under local lockdowns all need to be put in place now. Ministers must not wait until the economic storm is once again at fever pitch before they act.”