The Herefordshire & Worcestershire Chamber of Commerce has released the results of the latest Quarterly Economic Indicator, outlining business performance between August and October 2020.
It has been another difficult quarter for businesses as Covid-19 restrictions have persisted. Sales grew by 9% compared to last quarter but growth has slowed dramatically. In Quarter 3, after the first lockdown was lifted, sales increased by 57%.
Cashflow continues to be a problem for many businesses. For the third quarter in a row, more businesses have experienced a reduction in their cashflow than those experiencing an improvement. While government schemes, including loans and grants have been invaluable, it remains to be seen whether the extension of existing schemes will be enough to sustain businesses through a difficult winter.
Business investment remains chronically low with many firms having to continuously monitor expenditure during a time of crisis rather than being able to invest. The uncertainty of the EU Exit negotiations has added to the problem with businesses unwilling to commit to investment plans until the future relationship looks clearer.
While there is still a long way to go for businesses to fully recover from the pandemic this quarter’s report did have some good news. The announcement of Covid-19 vaccines seems to have increased business confidence. Confidence in yearly turnover has quadrupled since last quarter to 19%, up from 5% in Q3, and employment intentions have also risen. 22% of businesses expect their workforce to increase over the next 3 months, compared to an average of 25% since the Economic Survey began in 1999.
Sharon Smith, CEO of Herefordshire & Worcestershire Chamber of Commerce, commented: “The UK economy will only be able to recover once there is more certainty surrounding both EU Exit and any future Coronavirus restrictions. Although a tiered approach is clearly preferable to a national lockdown it still places significant challenges on businesses who have already had to deal with crippling restrictions for most of 2020.
“Businesses will be keen to experience a period of stability as we move into 2021. Although Herefordshire and Worcestershire have begun the tiered approach in Tier 2 the hope is that, through hard work, we will be able to move down to Tier 1 soon. And as vaccines are now being rolled out there is some hope that restrictions will be lifted in the coming months. As ever the Chamber will continue to support local businesses as they recover and grow, creating jobs and positively contributing to society and the economy.”
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