Nearly a third of businesses in Wales are anticipating having to make redundancies when the 海角视频 Government’s Coronavirus Job Retention Scheme ends in October, shows new research from Gambit Corporate Finance.
The Cardiff-based firm conducted interviews with 60 businesses and organisations, from manufacturing to fintech and including universities, in Wales to gauge their current trading positions and how they envisage things over the next year to 18 months.
The findings, which were presented by Gambit partner Frank Holmes to a virtual meeting of Cardiff Business Club, showed that 30% of businesses are forecasting making redundancies when the Job Retention Scheme, currently paying the salaries of more than eight million furloughed workers, as well employer NI and pension contributions, is phased out at the end of October.
Moreover, 60% of those surveyed believe that once furloughing support concludes, it will lead to more than two million redundancies in the 海角视频.
Of firms in the £25m to £100m annual turnover bracket, a quarter said they had secured loan funding under the 海角视频 Government’s Coronavirus Business Interruption Loan Scheme, which provides lending of up to £5m and the Coronavirus Large Business Interruption Loan Scheme that can provide funding up to £200m.
Some 60% believe the economy will experience a U-shaped recovery, with the downturn stretching out to 2022, until things start to pick up. Very few anticipate a rapid bounce back for the economy through a V-shaped recovery.
Asked to summarise their thoughts on the economic environment over the next 12 to 18 months in one word, there was a 60:40 split in favour of negative to positive sentiment in the choice of words.
Mr Holmes said: “Negative sentiment was 60%, with words like turbulent, terrible and tough, with 40% positive or neutral with words like optimistic and opportunity.”
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The Brexit word, or more pointedly whether the 海角视频 Government can strike a new trade deal with the EU or fall on Welsh Trade Organisation terms from the beginning of next year, didn’t come out as a concern/opportunity.
Mr Holmes said: “The B [Brexit] word is one thing, but we now have to focus on the ‘C word’, in the next normal which is collaboration. That means collaboration between business, academia, government, public services and social enterprise. It is not business as usual, but ‘business back better’.”
The survey also reveals that 60% will make significant changes to their working practices and staff training methods. Moreover, some 50% expect financial returns to decline, while as many as 70% expect to reduce R&D expenditure, an area of particular concern as such investment is vital to improving productivity and output of the Welsh economy.
Mr Holmes said: “It has been said that Covid-19 is a contradiction, it is personal yet global, it is invisible, but visible and it doesn’t discriminate. It is clear what we will not return to the normal as we knew it.
“Precisely what is the new normal is unclear, but it is critical that we reconstruct the future and not dwell on solving problems of the past. It will be determined by countless decisions made by individuals, companies, government, and institutions. So on the one hand you could have less prosperity, lower growth, widening inequality, more bureaucracy and rigid borders, or on the other a burst in innovation and productivity, smart government, at all levels, in a reconnected world.”
He said the alacrity of response to the pandemic, showed the same approach could be applied to measures to improve productivity as well as on climate change.
He added: “How can we ever tell ourselves that we cannot be faster on the back of the fact that we turgo-charged decisions in this crisis. So how can we ever tell ourselves that we cannot be faster and accept that being indecisive is a decision in itself?”