October 2020

WARWICKSHIRE MEANS BUSINESS

Business confidence improves

Business confidence in Coventry and Warwickshire has started to improve after the massive hit it took at the height of lockdown, according to a new survey.

The latest Quarterly Economic Survey by the Coventry and Warwickshire Chamber of Commerce showed that the outlook for the region was still short of pre-Covid levels and that while business morale has shown a marked uplift it still hangs by a thread.

The survey, which is analysed by Warwickshire County Council, is sponsored by Prime Accountants Group and feeds into the national survey by the British Chambers of Commerce (BCC).

Warwickshire County Council’s analysis uses 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.

Business confidence in the second quarter of 2020 dropped to 38.3 in the service sector but rose to 54.4 in the latest survey. In manufacturing, it rose from 39.0 to 47.7.

There were improvements across the indicators of domestic sales, overseas sales, investment and cashflow, and employment in both the service sector and manufacturing. All were still, however, way short of the levels prior to the Coronavirus crisis and were all still below 50.

David Ayton-Hill, Assistant Director for Communities at Warwickshire County Council, said: “While it is good to see a rebound in the economy from Q2, particularly with regard to sales, cashflow and employment, there is still quite some way to go before we return to anything like pre-Covid levels.

“As we see infection rates rise again across the UK and in Coventry and Warwickshire, it is vital that businesses look to adapt to new ways of working and become ever more resilient to change and disruption.

“A range of support is available, both from national and local government, and we would urge businesses to explore the help and assistance that is available as we look to support the recovery of the economy.”

Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, added: “Confidence has improved but only relatively speaking. We are comparing this quarter with Q2 when the economy was, largely, in hibernation.

“Businesses were, to a considerable degree, in a state of shock and it’s no surprise that almost every single economic indicator dropped to a record low.

“The third quarter has seen many areas of the economy beginning to tentatively reopen and that has generated something of a recovery in confidence but the overall economic outlook is still short of where we were prior to the crisis.

“It’s also very difficult to gauge right now if the confidence that businesses are experiencing is thanks to the huge levels of Government intervention.

“We must also acknowledge that many businesses remain unable to operate, especially those in the leisure and events sector which have been affected by the most recent Government restrictions.

“So, the final quarter of 2020 is going to remain challenging with the ongoing Coronavirus crisis coupled with the looming end to the Brexit transition.

“It’s vitally important that Government keeps its options open in terms of stimulating the economy and remains agile enough to support businesses as the crisis continues to evolve.

“As a Chamber, we will continue to feedback to Government where help is needed but will also continue to support the businesses across the patch with advice and guidance through this next phase of the crisis.”

Pictured: Louise Bennett with Steve Harcourt (Prime Accountants Group).

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