C&W Chamber chief echoes firms' cash danger
A nationwide survey has revealed that businesses are showing some signs of recovery – but are in danger of running out of cash in the next few months.
The Coronavirus Business Tracker, compiled by the British Chambers of Commerce, has shown that business conditions improved only moderately in the weeks since the UK economy suffered an historic contraction in the second quarter of the year.
It has reported that 38 per cent of firms had seen revenues pick up in the first week of August, but that companies are still reporting high levels of reliance on Government support schemes to help stem cashflow issues.
More than a third of businesses said that they had less than three months of cash in reserve.
Louise Bennett, CEO of the Coventry and Warwickshire Chamber of Commerce, said: “Business to consumer companies are more likely to have noticed a pick up but that is after being fully locked down so they have experienced some pent-up consumer demand.
“Again, the report points to rocky times ahead as the Government’s business measures start to tail off, and the picture is extremely testing for large parts of our economy - and that is before taking into account any local lockdowns which might occur.”
The tracker showed there was a slight improvement in the number of respondents reporting a decrease in their cash reserves (50 per cent compared to 55 per cent), but it remains more than double the number reporting an increase (22 per cent).
BCC Director General Adam Marshall said: “While some firms are seeing improvements in trading conditions, we are still very much in the eye of the storm, with further turbulence ahead.
“As the Government’s emergency measures begin to wind down over the coming weeks, and with the prospect of further local lockdowns still very real, businesses across the UK are going to need further support to weather uncertainty over the coming months.
“Slashing the jobs tax by taking steps to reduce the burden of employers’ National Insurance contributions, big new incentives for business investment, and targeted support to help businesses placed under local lockdowns all need to be put in place now. Ministers must not wait until the economic storm is once again at fever pitch before they act.”
