Coronavirus: Survey suggests business confidence at record low

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Business confidence in many areas of the economy is at a record low, a new survey has indicated.

The Scottish Chambers of Commerce (SCC) survey suggests retail and construction have been among the worst hit sectors during the Covid-19 crisis.

But 95% of tourism firms also reported a fall in business confidence.

The SCC said the UK and Scottish governments need to accelerate investment plans in order to prevent a “tsunami of jobs” being lost.

The survey, conducted between April and June, found cash flow has sunk to a record low in many industries, with a high number of companies applying for credit to see themselves through lockdown.

Tim Allan, president of the SCC, said: “In many instances, these results are among the worst over the 30-year history of the survey.

“It is critical that governments in Holyrood and Westminster continue to provide business support for companies during and beyond the easing of lockdown restrictions.

“A sudden end to these vital financial support measures would not be welcome by anyone and a tsunami of jobs would disappear overnight.”

Mr Allan warned local economies “may be lost forever if action is not taken now”.

The quarterly SCC survey covered 525 firms operating in Scotland and it shows a 70% decrease in confidence in the construction sector.

Elsewhere, around half of manufacturing firms in the survey reported falls in orders and sales revenue trends in retail “have massively fallen”.

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Many businesses closed during lockdown are beginning to reopen but still face an uncertain future

Prof Graeme Roy, director at the University of Strathclyde’s Fraser of Allander Institute, said that the latest survey painted a sombre picture of the scale of the challenge now facing the Scottish economy.

He added: “What is particularly worrying is the employment outlook. The survey shows a clear warning of what is to come, with a sharp rise in unemployment now inevitable as businesses adjust to a new normal.

“The immediate priority for many businesses is survival.”

‘Swept into poverty’

Meanwhile, Citizens Advice Scotland (CAS) has warned the response to the coronavirus crisis will be “vital for defining the next decade”.

The charity has reported a surge in the number of people seeking advice on redundancy.

CAS social justice spokeswoman Mhoraig Green said: “This is a stark increase in demand for advice around redundancy, it’s clear that the economic impact of Covid-19 is being felt now.

“We need an approach that protects jobs and creates new ones, as well as strengthening the social security safety net to prevent people being swept into poverty by an economic storm.”

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