Confidence stabilises as use of government schemes grows

Coronavirus business tracker: April 14th 2020

Slightly more businesses think they will survive the coronavirus crisis now than two weeks ago

The long-term impact of the decline (and implications of large-scale government borrowing) remains unknown.

Following our first wave of data tracking business perceptions during the coronavirus crisis, we can see that the negative impact of the outbreak on UK businesses continues to deepen. More than eight in ten (83%) small businesses and 85% of medium and large businesses report that Covid-19 is negatively impacting them (2-week increases of 10pp and 16pp respectively).

However, whilst negative impacts spread and revenues continue to slide, business confidence in surviving the crisis has stabilised. Around two thirds of small businesses (64%) and 71% of medium and large businesses say they are confident that their businesses will survive (these are both marginal increases compared to two weeks prior).

This stabilisation of confidence is likely to be linked to the introduction of various business support schemes, with one third of medium and large businesses (33%) reporting that they are already using the  Coronavirus Job Retention Scheme  (which enables employers to claim  wages for staff on furlough leave). One in five small businesses (21%) are also actively considering the recently announced Self-employment Income Support Scheme.

So what does this tell us?

The good news certainly is that government schemes are being used and appear to be stabilising business confidence. We have not seen the deterioration in confidence survival rates which might have been expected without government intervention.

However, with revenues continuing to suffer, the long-term impact of the decline (and implications of large-scale government borrowing) remains unknown.

The hope is that with short-term tax-payer backed support on hand to keep businesses afloat, enhancements can be made to business systems and management that will enable a rapid re-bound post-crisis.

At the heart of this evolution will be cloud-based technologies and remote working solutions – investment in both are being actively considered by 35% of medium and large businesses.

Savanta’s bi-weekly coronavirus business data tracker asks small business owners as well as business decision-makers in larger organisations how they are managing as the world struggles to get to grips with the COVID-19 pandemic.

Get in touch to ask your own questions or find out more.