A THIRD of companies say they will decrease the size of their workforce in the next three months according to a shock chamber of commerce survey.
The figures, from Herefordshire and Worcestershire Chamber of Commerce, in partnership with the Local Enterprise Partnership, are revealed in the body’s latest quarterly economic report, outlining the impact of coronavirus on businesses during May and June 2020.
Covering the period May 18 to June 8 the key finding are:
74 per cent of businesses surveyed experienced fewer UK sales than last quarter
59 per cent of businesses surveyed expect their turnover to decrease over the next three months
Confidence and plans to increase investment have reached a record low
Only 20 per cent of businesses were operating at full capacity
A third of businesses expect to reduce their workforce in the next three months
The report says the outbreak of Covid-19 had led to a crisis which characterised by an unprecedented suspension of economic activity with an unparalleled impact on companies in the two counties.
The government is estimated to have borrowed £62.1 billion in April 2020, the highest borrowing in any month since records began in January 1993, to fund the unprecedented package of support offered to businesses during the Covid-19 pandemic.
Yet, even where schemes have worked well, the report says this injection of cash fails to mask how difficult this quarter has been for businesses.
In the most concerning statistic from the report, a third of businesses expect to reduce their workforce in the next three months.
Such figures only reinforce forecasts from the Office for Budgetary Responsibility, which expect the unemployment rate to peak at a level between 9.7 per cent and 13.2 per cent.
The report concludes that the next three months will be absolutely critical for businesses but emphasises that it is unlikely the speed of the recovery will mirror the pace of decline for the hardest hit sectors.