There are signs of a nascent recovery after the COVID-19 pandemic caused a historic collapse in the local economy, according to the second GM COVID-19 Recovery Tracker survey conducted by the Greater Manchester Chamber of Commerce.
The Chamber’s COVID-19 tracker surveys have shown dramatic reductions in customer demand across all sectors. Liquidity has been a major concern for businesses, resulting in business confidence being at its lowest ever levels.
The latest survey results show that there has been a small improvement in customer demand measures relative to the levels recorded in April and May.
However, the balances relating to customer demand are still negative, which means more businesses reported reductions rather than improvements. The reduction in sales and revenues remains the primary challenge that businesses have been facing during the pandemic but compared to historic lows during the lockdown, there is continuing improvement.
“The Chamber’s COVID-19 tracker surveys shows how Greater Manchester’s economy has changed during the COVID-19 pandemic. After the historic economic collapse, things are beginning to look better and there is cautious optimism amongst businesses.”
(Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce)
With the increase in customer demand and revenues, cash flow positions have improved. Nearly 40% of businesses now report being confident about increasing their turnover and margins in the coming months.
“The improvement in cash flow positions is particularly encouraging because this could help business investment and preserving jobs. In June, the balance relating to cashflow was -53.7. It is now -16, a marked improvement. There is a lot of bad news in the survey, but there are signs of some good news coming through as well, especially in the last few days. Various factors have contributed to this: with restrictions easing, customers could have resumed operations and paid pending invoices. Moreover, the HMRC has speedily processed most claims relating to furloughed staff.
The data confirms our view that there will be a ‘tick-shaped’ recovery rather than a rapid ‘V-shaped’ recovery as suggested previously. This means we expect the recovery to be gradual and steady rather than a sharp upturn. Although the restrictions imposed recently to lower the infection rate will add to business anxiety, I would expect the short-term outlook to be more or less on target provided there is no second wave of infections that require a full lockdown to be implemented.”
Fieldwork for the second GM COVID-19 Recovery Tracker was conducted between 16th July – 31st July and received 90 responses.
The third Recovery Tracker is now open and can be filled in here.