Home News & Articles UK firms still operating at half pre-virus capacity, says BCC

UK firms still operating at half pre-virus capacity, says BCC

Firms are still operating at about half their pre-virus capacity, with the economy still “in first,” British Chambers of Commerce says.

The BCC’s coronavirus impact tracker – billed because the largest business survey of its type – found that on average, companies were at 53% of capacity.

Half of the firms cited consumer demand and possible local lockdowns as obstacles to completely restarting operations.

The BCC again involved tax cuts to assist businesses to recover.

Adam Marshall, BCC director-general, said: “Our findings demonstrate that the UK’s economic restart remains considerably in first .”

The survey of firms between 6 July and 10 July revealed that the steep decline in business conditions seen at the beginning of the pandemic is leveling off, consistent with respondents.

However, almost half the firms, 46%, still reported a small or significant decrease in revenue from UK customers compared to June.

It also revealed that 43% of companies reported a rise in late payments from customers in comparison with the last six months of 2019.

Mr. Marshall added: “Businesses are grappling with reduced customer demand, an on-going cash crunch, and therefore the potential for further lockdowns during uncertain autumn and winter ahead.

“The prime minister’s encouragement to return to workplaces and further updates to business guidance won’t be enough on their own.

“The time has come for the govt to require radical steps to slash the tax burden around employment to assist companies to pay valued staff, instead of the
‘Many people would find it overwhelming’
At the instant, Rick Cressman can only dream of getting his hotel back to 50% capacity. Nailcote Hall, near Coventry, is losing £40,000 a month, with banks borrowing Mr. Cressman’s financial lifeline. The business had been making £3m a year.

“Fixed costs mean we must operate at scale,” he said. “We would wish to work at 50% capacity just to show a little profit.”

His large hotel, employing 80 staff before lockdown, was a well-liked venue for weddings, party nights, and visitors to the nearby National Exhibition Centre (NEC).

Nailcote Hall plans to re-open on 24 August, although since Mr. Cressman took the choice another big NEC event he hoped would usher in business has been canceled. “We are taking a touch little bit of a punt,” he says.

However, while the BCC survey reveals many firms are still fearful about demand, Mr. Cressman is confident his customers will return relatively quickly.

“Many of our bookings haven’t been canceled, just pushed back,” he says. Even so, the hospitality sector has strict distancing rules, so getting back to the times when the hotel had average wedding parties of 100 guests might be an extended way off.

Staff are gradually being brought back from furlough, with training underway and therefore the re-arrangement of the hotel to form it Covid-19 compliant ongoing.

Mr. Cressman said: “We got to rise up to 50% capacity with about two months. I have been during this business for 40 years. I’m sure many of us with less experience would find it overwhelming.”

The survey was administered before Boris Johnson’s announcement last week that coronavirus restrictions will ease further in England under plans for what he called a “significant return to normality” by Christmas.

Under the new guidelines, people may use conveyance for journeys immediately, while advice for employers will change from 1 August.

Companies will have more discretion to bring staff back to workplaces if it’s safe to try to so, the prime minister said.

However, economists said that despite the easing of the lockdown and hopes that the pace of staff being brought back from furlough would be devoured, the survey suggests the outlook for jobs was gloomy.

Jack Kennedy, the economist at Indeed, an employment website that helped produce the BCC’s report, said: “The slowdown in consumer activity mirrors hiring activity within the UK.

“Today, there are 60% fewer job postings than there have been before the outbreak of Covid-19, then far there are few signs of a V-shaped recovery in vacancies.

“The furlough scheme has been a crucial lifeline to many people but the fear is there’ll be a sudden rise in unemployment then duct has been severed,” he said.

https://www.bbc.co.uk/news/business-49328855