Impact of virus is 'stark'

Half of firms ‘can survive only until early summer’

Graeme Roy

Graeme Roy: ‘immediate consequences are stark’ (pic: Terry Murden)

Half of businesses in Scotland say they have only enough work to survive until the middle of June, according to a revealing new survey.

However, almost all those asked believe government measures to counter the impact of the coronavirus will help them to retain staff.

These are among the key findings from one of the first major surveys on the impact of the global health emergency on Scotland’s business community.

The Scottish Business Monitor, a survey of 500 businesses in the past week conducted by the Fraser of Allander Institute in conjunction with Addleshaw Goddard, provides an insight into companies’ survival prospects and preparations to rebuild.

It reflects unsurprising expectations of a severe downturn in volumes and prospects.

Half (51%) had shed staff because of the pandemic, while 81% said they have reduced the number of hours staff are working.

Re-starting our economy, when the time is right, will require careful thought

– Graeme Roy, Fraser of Allander Institute

The pandemic has caused a sharp reversal in wage expectations. On average, the number expecting wages to rise has fallen from 72% in Q4 2019 to 27% in the current quarter.

Four in five businesses (80%) state that credit availability over the next three months will be very important or important, against 53% in the previous quarter. This is a reversal of a long-term trend seen over the last few years as credit availability has been less of an issue.

When asked how long businesses could survive under current levels of trading, of those who knew, 54% said less than three months while 32% said they could survive for four to six months.

Whilst these findings provide a stark indication of the shock the Scottish business community has felt in recent weeks, there is optimism that Government schemes will not only support businesses throughout the downturn but may also provide a platform for future economic recovery.

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