Fewer than half of businesses confident they will survive
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The Office for National Statistics published some very interesting numbers around Covid-19 and the economy last week.
It runs a fortnightly Business Impact of Coronavirus (COVID-19) Survey (BICS) survey to understand how the pandemic is affecting employers and employees. Of the 4,598 businesses that responded to the latest survey, fewer than half (40%) were confident that they could continue operating during the Covid-19 pandemic, for the period 9 March to 22 March 2020.
This lack of confidence despite multi-billion pound government support raises questions around how well targeted and accessible the support package is, and why businesses feel they may not survive despite being able to furlough staff, deferring taxes and being exempt from business rates.
Almost a third (29%) of businesses surveyed said they had to reduce staff numbers in the short term. Sectors with the largest proportions of employers doing so included the hospitality, support services and the arts and recreational sectors.
Although supermarket chiefs and politicians were keen to dispute this, in the past few weeks it became apparent that supply chains have been impacted by the pandemic and lockdown measures. The ONS has found that in the week commencing 23 March, the number of unique visits to UK ports fell by 7.3%, and total visits to UK ports decreased by 12.4% in the same period.
This has led to price inflation in some products. Online prices of items in the high-demand products basket have increased by 1.5% between week commencing 23 March and the week commencing 30 March, just as consumers are more squeezed.
The economy could look very different at the end of this year to how it looked at the start of it. What is your view – how will the economy look after Covid-19?
