The results of the first fortnightly GM Recovery Tracker survey conducted by Greater Manchester Chamber of Commerce show a slight improvement in customer demand as the relaxation of lockdown measures continues.
After a historic collapse in demand during lockdown, the survey reveals an improvement in sales but 43% of the respondents fear their revenues may dip further in the coming weeks. Order books are also still a concern for many businesses with only 21% reporting an increase in advance orders as against the half that reported a decrease.
With customer demand showing improvements, cash positions have improved in the last few weeks. Businesses report that payments from HMRC for staff furloughed under the Coronavirus Job Retention Scheme were all received in time, which has helped cashflow positions.
The impact of COVID-19 on employment has started to be felt across sectors with many established businesses announcing job losses. The survey shows more firms are reporting planned reductions to their workforce with 13% of respondents expecting they will make staff reductions. Since furloughing of staff is no longer possible, it is likely that planned reductions will be in the form of redundancies.
Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce, said: “The results reflect the continued relaxation of lockdown measures and the reopening of both the retail and hospitality sectors. The economic fallout from this pandemic is affecting all sectors and all parts of Greater Manchester and the wider North West. There is still a lot of uncertainty, which is affecting business confidence with levels similar to those recorded in June. This could cause some volatility and some hurdles in the path to full recovery.
“Based on the Recovery Tracker results and recently released GDP data, it is unlikely that the UK will experience a rapid ‘V’ shaped recovery. Any improvement is likely to be gradual and spread over the next three to four months.
“Assuming there is no second wave requiring further lockdown measures, the most likely scenario is a Nike swoosh or tick mark shaped recovery, with customer demand expected to return to positive territory towards the end of Quarter 3. This recovery forecast is based on current data and will be continuously updated with the results of subsequent Recovery Tracker surveys.”