Coronavirus update: Business confidence falls as firms start to feel impact of pandemic

April 1, 2020

Three-quarters of South West firms were hit by the coronavirus pandemic in the first two weeks of March, according to a new survey which also shows the outbreak has triggered a marked fall in businesses confidence in the region.

Lloyds Bank’s Business Barometer – a monthly survey of more than 1,000 companies carried out by the high street lender – shows that 75% of South West firms said they had been affected or expected to be affected by the outbreak between March 2 and 16. 

This was before the government announced its £330bn emergency package of business support measures businesses on March 17 and the national lockdown and closure of pubs, cafes and restaurants announced on March 20.

The Business Barometer shows confidence among South West firms during the period fell eight points to 16% – a figure reflecting the percentage of firms that are positive in outlook against those that are negative.

These businesses’ confidence in their own prospects feel from 22% in February to 13% while their optimism about the wider economy fell seven percentage points to 19%.

Across the UK, overall business confidence fell by 17 percentage points to 6% in March – its lowest level since last October at the height of the political stalemate over Brexit.

Confidence fell sharper during second week of the survey at minus 3%, matching the lowest dip in the barometer since December 2011 and the most severe since March 2009 when the global financial crisis was at its peak.

Despite the dramatic fall in confidence among South West firms, the region had the second highest level of optimism in the country, behind the North East with a rate of 23%. London was third at 12%.

Businesses in the South East were the least confident, with an overall confidence of minus 10%, 16 points below the national average.

All four sectors making up the survey recorded lower confidence levels with retail suffering the sharpest decline – tumbling 21 percentage points to 9%.

Manufacturing also experienced a big decline – from 31% to 11% – while services were down 18 points to just 1% and construction by 15 points to 14%.

The Business Barometer, which questions 1,200 businesses monthly – 62 of them in the South West – provides early signals about UK economic trends both regionally and nationwide.

Lloyds Bank Commercial Banking South West regional director David Beaumont said the survey results showed the impact of the virus was already beginning to hit South West businesses before social distancing measures were announced by the government.

“With three quarters of the region’s firms already affected or expecting to be impacted, it is no surprise that their overall confidence and business prospects have taken a dip,” he said.

“As tough trading conditions weigh on businesses’ collective outlook, we can likely expect a more subdued picture next month.”

He said Lloyds was anticipating making available £18bn of support for businesses this year and had set aside £2bn of arrangement fee free finance to help small firms affected by Covid-19.

Among businesses it has already helped is Noah’s Ark Zoo Farm in Wraxall, North Somerset, which has been forced to close for the duration of the outbreak.

It has secured a six-figure funding package to keep its 1,000-plus animals healthy and happy during the lockdown.

“Funding like this is also designed to help businesses manage their cashflow, which might have been affected by supply chain interruptions or employee absences,” he added.

“We’re also advising firms on how they can access the Coronavirus Business Interruption Loan Scheme (CBILS). We remain committed to supporting our customers in the weeks and months ahead in any way we can.”



Comments are closed.


Reach tens of thousands of senior business people across Swindon & Wiltshire for just £70 a month. Email for more information.