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Snapshot of British Economy Shows 45% of Business with Lower Than Normal Turnover

The Office for National Statistics has started to produce a weekly report detailing the impact of the coronavirus pandemic. The idea is to provide faster data that spots trends and reflects the rapidly changing situation in the economy and society in general.

Lower Turnover

The ONS survey revealed that 45% of businesses say that their turnover was lower than expected between the period of 9 to 22 March this year. Only 5% of companies said that their turnover was higher than expected. This data was collected from 3,642 companies.

Of those firms that have seen lower turnover, 98% of them blamed it on COVID-19. The downturn was seen across all types of business and reflects the situation in the run-up to the forced closure of all non-essential businesses on 20 March.

On another point, 46% of business confirmed that they had asked staff to work from home during the period mentioned earlier. 27% of companies reported a reduction in staffing numbers and 5% said that they were recruiting for new workers.

59% of companies that export goods said that their business was affected by the coronavirus outbreak before 20 March. In terms of imports, 57% had noticed an effect before this date. This has led to more firms turning to international debt collection to recover funds.

Changing Prices

The prices of goods in the HDP basket have been soaring. The biggest mover was cough and cold medicine, which increased by over 10% in the space of a week. The biggest faller was antibacterial wipes, at 2.8% lower.

Overall, online prices for products in the HDP basket rose by 1.1%, although food items with a long shelf life fell by 0.4%. 13 of the 22 items in the basket either rose or fell by up to 1%.

68% of the country’s businesses said that the prices they sell at were steady. 63% said that they were able to keep on buying at the same prices as the crisis began to ramp up.

62% of UK Companies Running Out of Cash

In a separate study, the British Chambers of Commerce revealed that 6 out of 10 UK firms are rapidly running out of money to carry on. This number of businesses have three months or less of cash in reserve.

The BCC poll showed that a majority of firms across the country are suffering due to the collapse in sales during the lockdown measure. 600 of their members took part in the survey at the end of March.

They expect these figures to get worse over time, and 1 million British companies could go under in the next month, leading to widespread job losses.

The chancellor, Rishi Sunak, is expected to move to ease their cash flow worries by introducing changes to the aid packages recently introduced. It is believed that he will force banks to hand over loans more easily and with lower interest rates.

Meanwhile, across in the US, the number of new claims for unemployment benefits has smashed through the 6 million mark. It rose from 3.3 million the week before to an unprecedented 6.6 million last week.