Nearly a third of businesses in the Midlands have launched new products and services during the Coronavirus pandemic, according to a poll of business leaders by accountancy and advisory firm BDO LLP.
Despite challenging trading conditions, companies have continued to invest in growth, with 33 per cent of companies surveyed in the East Midlands acquiring another business since lockdown began (19 per cent in the West Midlands) and 15 per cent injecting finance into new technology.
Compared to 12 months ago, 75 per cent of businesses across the Midlands admit that revenues are down by up to half. However, in the West Midlands, 18 per cent of companies said they did not furlough any employees, with 23 per cent choosing not to make any staff redundant. This compares to just two per cent in the East Midlands. Despite revenues falling, overwhelmingly businesses across the region are confident of being able to repay additional debt taken on in the last few months, with more than two-thirds saying they intend to pay it back.
Tim Foster, partner and Head of Risk and Advisory Services, Midlands, said: “It’s very clear that Midlands businesses have been profoundly affected by the Coronavirus pandemic, with staffing and revenue levels understandably falling, while debt and borrowing has risen. A third of medium-sized companies have taken on between £31 and £40 million of additional debt as a result of COVID-19.
“However, in certain quarters, the region has rallied and shown a resilience to invest in new service and product offerings, taking the opportunity to re-think their businesses in a bid to recover from the global pandemic. The road ahead is far from easy, with many companies admitting that current funding arrangements need to be urgently reviewed in order to survive the next six to nine months, but recent Government initiatives to incentivise businesses appear to be working.”
The survey revealed that 79 per cent of companies in the East and West Midlands believe the impact of COVID-19 will lead to permanent job losses, but the UK Chancellor’s announcement of a £1,000 bonus per employee for bringing staff back from furlough has changed their plans.