Many businesses don’t expect to be ‘viable’ again until at least December or the new year, long after the Government’s furlough scheme ends in October.
A survey of 500 UK business decision makers found that turnover has dropped even further since the UK first went into lockdown, with almost 63 per cent of organisations experiencing a lower than expected turnover last month, by an average of 50%.
The Covid-19 UK Business Barometer, conducted by Sapio Research and B2B agency Skout, asked CEOs and senior managers about their outlook and only 21 per cent experiencing a reduced turnover this year thought their organisation would be operating at pre-pandemic levels again by September.
Forty-five per cent said they were already using financial support from the government, while a further 26 per cent plan to. Without furlough, a third of respondents claimed they would have failed within a month of lockdown.
However, despite the extension of the furlough scheme to the end of October, research suggests the government needs to go further, with confidence in the government decreasing as lockdown goes on.
I think there’s going to be a fundamental shift in the workplace and interiors space, and there’s a possibility that we’ll never return to what we had before
When asked how confident they felt in the government for the future (in three months’ time) almost a quarter of respondents said ‘not at all confident’, – a rise from the 18 per cent who answered this way when asked the same thing in April.
Andy Hogg, director of The Bricklayers Arms, in Sevenoaks, said: “As the owner of a pub with 33 staff, there’s no way we would have been able to pay them without the furlough scheme, which was one of the key sources of stress for me at the beginning of lockdown.”
Adam Burtt-Jones, co-founder of design consultancy, Burtt-Jones & Brewer, said: “We experienced a drop in workload by around 60-70 per cent initially when we went into lockdown, but the furlough scheme gave us significantly greater financial security. Where clients paused projects, it enabled us to essentially pause our staff.”
The research also indicated that businesses expect Brexit to hinder the recovery of the UK economy compared to other nations, with 63 per cent claiming that it would have a negative impact.
While half of those with international clients said they expect international markets to recover by March 2021, just 41 per cent expect the same for the UK.
Vincent Efferoth, managing director at alcoholic tea producer, NOVELTEA, said: “As we focus primarily on the UK, German and Chinese markets, we moved into crisis mode on March 1. Now we’ve started to think about longer-term mitigations as well as embracing ‘the new normal’ and looking for growth opportunities.”
Adam Burtt-Jones added: “I think there’s going to be a fundamental shift in the workplace and interiors space, and there’s a possibility that we’ll never return to what we had before. In a personal way, it’s encouraging to think of people using workspace in a different way.
“Moving forward, we’re going to need to be more multi-skilled and versatile. However, we do realise that there’s opportunity as well as challenge. If we navigate this carefully and cleverly, we’ll be in a good place. I’d almost be disappointed if we went exactly back to the way we were before!”