Research has confirmed the likely financial impact of Coronavirus on UK businesses, with 63% of companies surveyed lowering their turnover expectations for 2020, by 37% on average. 54% also reported an immediate drop in turnover in March, by an average of 45%.
The Covid-19 UK Business Barometer, conducted by Sapio Research and B2B agency Skout, shows a negative financial impact for many, 11% of respondents said their revenue went up in March by an average of 37%. 6% are expecting revenue to be higher across 2020, on average by 39%.
The research was conducted in mid-April with a cross-industry sample of 500 businesses from SMEs to large corporations. All respondents were C-level or in other management roles.
Business supply chains have also been hit hard by the crisis which appears to be significantly impacting business-to-business service levels. 66% reported a reduced level of service from their supply chains in March/April, compared to just 5% reporting an improved level of service over this time. Service levels from suppliers are expected to level out to a degree over the next three months, although 40% are still anticipating issues in July.
Despite government measures to help businesses such as the Coronavirus Job Retention Scheme, only 23% of respondents have high confidence in the government’s ability to support the UK economy. This confidence level is not expected to increase over the next three months.
Other key findings include:
- 49% of businesses surveyed have increased their levels of home working
- 31% are planning to furlough, if not already
- 25% have cut working hours
- 21% have reduced or deferred pay
- 9% have made layoffs or redundancies
- 7% have made new hires as a result of the pandemic
Remote working tops the list of anticipated lasting changes from the pandemic. For many this will include improving remote working practices; increased managerial acceptance of staff working remotely; and improved adoption of remote working technology. One in ten businesses surveyed said they will relinquish bricks and mortar offices and premises.
Commenting on the findings Tobias Raeber, who serves as non-executive director in number of businesses with between GBP5 and GBP30 million revenue said, “after the first shock, businesses are now adapting to the new environment. The struggling ones are cutting costs in any way imaginable to stop the drain of liquidity, as well as working on securing emergency cash support. But many are experiencing difficulties as there are gaps in the schemes. Beyond that, many managers are being forced to fundamentally re-think their proven but now often obsolete business model to hopefully poke into novel pockets of revenue.”
A full set of findings can be found here.
Further waves of the Covid-19 UK Business Barometer Survey will be conducted and released throughout May.