North East firms are suffering from low sales and fresh uncertainty over their futures, according to the latest survey from the North East’s largest business organisation.
The North East England Chamber of Commerce’s quarterly survey, which is conducted with Durham University Business School, shows a continuation of downward trends, with the effects of the coronavirus pandemic and renewed concerns about Brexit weighing on many firms in the region.
The survey shows that domestic and export sales are hugely behind where they were this time last year, though both showed an improvement on the last Chamber survey, which was carried out at the height of the first national lockdown.
Businesses also returned negative scores when asked about plans to invest in equipment and training, though there were small positives when firms were asked about future plans for recruitment and whether their turnovers would recover in the future.
The survey comes after Newcastle bank Virgin Money warned earlier this week that around 15,000 SMEs in the North East are likely to go out of business within a year, while Newcastle city centre business group NE1 said that the latest restrictions “threaten businesses and the very fabric of Newcastle city centre”.
Chamber president Lesley Moody said: “While there are some signs of increased positivity in these results, the overall level of business confidence remains low. Large parts of our business community report a highly uncertain outlook.
“Sectors such as retail, leisure and hospitality continue to face the twin challenges of public health restrictions and low levels of consumer confidence. Following recent Government announcements, the months ahead look extremely difficult for these businesses without further support.
“Other sectors are faring better, either through adaptation to new ways of working or by operating in markets that are more ‘Covid-proof’. Yet we must not forget the harm to business resilience and balance sheets that has been caused over recent months.
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"We have been extremely vocal about the need for Government to get on with its ‘levelling up’ agenda. Large parts of our region are among the worst hit by infection rates and local restrictions, having entered this crisis with above average levels of unemployment and inequality. These survey results only add weight to the argument that urgent action is needed to prevent these disparities growing further.”
As well as the effects of the pandemic, businesses in the region reported growing concern over the Government’s Brexit talks and increasing levels of uncertainty over the likelihood of a no-deal Brexit.
Some companies also highlighted problems caused by the Government being distracted from wider economic aims due to the coronavirus crisis.