ALMOST a third of Somerset firms which took part in a county-wide business survey expected to make redundancies in the next three months, while half expected turnover to worsen in the next year and three quarters had no plans to recruit.
But on the flip side, around 60% of businesses expected their workforce to remain the same in the next three months, a quarter said their cashflow had stayed the same and, surprisingly, almost 20% said they intended to upscale their companies in the coming months.
The findings are from the second quarter of the British Chambers of Commerce Quarterly Economic Survey (QES), which is organised in Somerset by the Somerset Chamber of Commerce with support from Barclays.
It is the largest private sector survey of business sentiment in the UK and the local results feed into the national survey which are closely watched by key policymakers, including the Treasury and the Bank of England. It is the first QES since lockdown and the global Coronavirus pandemic.
In Somerset, a record number of responses were received from across all sectors, with questions looking at a range of issues, including export sales and orders, employment prospects, investment, recruitment difficulties, cash flow, confidence and price pressures.
Locally, some 70% of companies reported a drop in UK sales and advanced orders, over the last three months 65% of firms reported a drop in cashflow and a quarter expected to downsize post COVID-19.
A separate survey found that in Somerset, up to the end of June, some 27% of the working age population had been furloughed, compared to a national figure of 24%.
Stephen Henagulph, Chief Executive of Somerset Chamber of Commerce, said: “There has been an unprecedented, almost overnight, contraction in the economy and the slump in cashflow is particularly worrying as that impacts directly on business activity and staff retention.
“We hope this is the low point for the economy as lockdown restrictions begin to ease but it’s essential we have these hard facts and figures to continue doing all we can to support the business community and to lobby on their behalf.
“These results are crucial to enable the key policymakers to make informed decisions and to fully understand the economic climate in Somerset and across the UK during these challenging times.”
Nationally, the survey found that UK economic conditions had deteriorated at an unprecedented rate across the UK and the number of businesses reporting increased domestic and export sales was now lower than in the worst quarter of the last recession in 2008-09.
Of the 14 key service indicators in the QES, 11 fell to their lowest level in the survey’s 31-year history, including sales, orders and cashflow. Some 7,700 firms took part across the UK, representing around 580,000 employees.
Graham Austin, Head of SME, South West, Barclays, said: “These figures clearly demonstrate what we are hearing from our clients, that small and medium-sized businesses up and down the country including Somerset are struggling with the impacts of coronavirus.
“Barclays is continuing to work hard to provide SMEs with the support they need to weather the immediate impact of the crisis and operate in the ‘new normal’. Public confidence after lockdown is difficult to predict so it’s important for us to help businesses survive this period and deal with new challenges that lie ahead.”
Results of the national survey can be found on Somerset Chamber’s website at www.somerset-chamber.co.uk.