Results from the latest British Chambers of Commerce (BCC) Coronavirus Business Impact reveal that businesses are operating at half of their pre-Covid 19 capacity on average, despite lockdown measures easing.

More than half cited reduced demand and possible future lockdowns as major obstacles to restarting day-to-day operations.

The business organisation’s tracker survey, which serves as a barometer of the pandemic’s impact on businesses and the effectiveness of government support measures, received 750 responses and is the largest independent survey of its kind in the UK.

The latest tranche of polling was conducted from July 6-10, in partnership with global job site Indeed, prior to the Prime Minister’s announcement on July 17, setting out the next steps in the coronavirus response for England.

On average, businesses said they were at 53% of their full pre-Covid 19 capacity. Customer demand (54%) and possible future local lockdowns (52%) were cited as the top two obstacles to maintaining day-to-day operations. 30% said other business costs, such as rent or salaries, were a major obstacle.

The steep decline in business conditions seen at the start of the pandemic is levelling off, but firms still face extremely challenging conditions:

  • Almost half (46%) reported a slight or significant decrease in revenue from UK customers compared to June.
  • 44% reported a slight or significant decrease in revenue from overseas customers, with 34% reporting no change.
  • 56% of firms reported a slight or significant decrease in cashflow.

Concerningly, 43% of businesses reported an increase in late payments from customers when compared with the last six months of 2019.

Flexible furlough, which allows businesses to bring employees back part time, began at the beginning of July. 31% indicated they have furloughed staff on a part-time basis, while 56% of firms surveyed said they still have staff furloughed full time.

13% of respondents said they had made redundancies since the beginning of the crisis, with 33% saying they intended to over the next three months. Redundancies were more likely in B2C businesses, which are experiencing the worst effects of a prolonged period of closure and reduced demand.

Prior to the Prime Minister’s speech on July 17 encouraging more people to return to offices where they can, 62% of respondents expected some or all of their staff to be working remotely for the next 12 months. This increases to 71% for B2B and falls to 53% for B2C firms.

Commenting on the findings, BCC director general, Adam Marshall, said: “Our findings demonstrate that the UK’s economic restart is still very much in first gear.

“Businesses are grappling with reduced customer demand, an on-going cash crunch, and the potential for further lockdowns during an uncertain autumn and winter ahead.

“The Prime Minister’s encouragement to return to workplaces and further updates to business guidance will not be enough on their own.

“The time has come for the Government to take radical steps to slash the tax burden around employment to help companies pay valued staff, rather than the Revenue. A major boost to the Employment Allowance, and an increase in the threshold for employers’ National Insurance contributions, should both be in the Chancellor’s sights if he wants to help viable companies save jobs as the furlough scheme comes to an end.”