Regional Economy Hits the Buffers

Economic activity ground to a shuddering halt in Q2 according to the latest survey from the region’s Chambers of Commerce. The latest results from West & North Yorkshire and Mid Yorkshire Chambers highlight just how big an impact the COVID-19 crisis followed by lockdown has been. The survey carried, out in collaboration with Leeds City Region Enterprise Partnership, reports all key measures have turned negative. With drops in results at their lowest level in the survey’s thirty one year history.

The service sector reported a significant decline in domestic sales, with leisure, hospitality and accommodation the most likely to report falling sales. Manufacturing continues across the region but at a much reduced level. Cash flow and lack of reserves featured strongly in the results, although government support schemes have supported many companies. Firms reported significant levels of remote working and furloughing of staff, the latter being a measure which in the short term has preserved jobs. However there are concerns that as the furlough scheme starts to taper off and, without new sales, to rebuild cash reserves there is a concern that we may start to see high levels of redundancies across the region

Speaking of the results Nick Garthwaite, Chair of West & North Yorkshire Chamber said that, “The regional economy has experienced a sudden and shuddering halt the like of which we have not seen in peace time, with all sectors reporting falling sales, investment and business confidence.
“As we enter the recovery phase, no doubt we will lose good businesses who, through no fault of their own, have been unable to survive, this is cause for sadness. However, this crisis presents an opportunity to rethink how government works, it will present opportunities to rebuild and renew our regional economies and help create new opportunities for business and communities. As a Chamber we will continue to push government to deliver on its Levelling Up agenda, working with stakeholders to ensure that we fix decades of regional imbalances in government investment in order to boost productivity.”

Although the data made for grim reading, the data was a little less negative in Yorkshire than the rest of the United Kingdom.

Martin Hathaway, CEO of Mid-Yorkshire Chamber, added, “Despite the fact there is more positivity here than in other parts of the country, no-one can disguise the fact that these results paint a devastating picture of the impact of coronavirus on our economy.
“We must never forget that behind every statistic is a story. Businesses are run by people who create jobs, generate wealth and support our communities. When firms suffer, as they currently are, the ripples extend far beyond the walls of the office, factory or workshop. That’s why these numbers matter and should serve as a wake-up call for those making decisions on what happens next.”
“There has been a huge amount of welcome government support – but as the payouts from these schemes become more distant and as the contribution to workers who have been furloughed reduces, we are facing an unprecedented situation with challenges the likes of which we’ve never seen.”

Roger Marsh OBE, Chair of Leeds City Region Enterprise Partnership and NP11 group of northern LEPs said, “The stark economic impact of the COVID-19 crisis on businesses and people of our region is all too evident in this quarter’s economic survey. Both export and domestic activity have taken a sharp downturn and many businesses are reporting increased risk as they look to rebuild their customer base after months of little to no activity.”
As lockdown restrictions begin to ease, we are beginning to see some signs that business activity is resuming, but the road to economic recovery will be long and challenging.”
The LEP and the Combined Authority are committed to supporting the region’s economy with a package of measures to help protect as many jobs and businesses as possible, including capital grants for businesses, skills support and training for those who have been furloughed or lost their job as a result of the crisis, or mentoring and peer-to-peer support from other business people. The LEP has already provided direct support to over 3,000 companies through the LEP’s business support service, as well as capital grants, webinars and mentoring support for affected firms.”