Coronavirus impact on North East manufacturing and service sectors ‘worse than 2009 crash’
The coronavirus crisis has had a worse impact on North East businesses than the global economic crash of a a decade ago, new figures show.
The results of the North East England Chamber of Commerce business survey suggest the impact of the lockdown has been every bit as bad as firms feared.
The survey shows sales for the manufacturing and service sectors fell to record lows of -54% and -63% respectively in the second quarter of the year, far worse than during 2009’s financial crash.
Cash flow was also at an unprecedented negative level of -48.2%.
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The survey also showed almost all the respondents had accessed Government support in some form with 65% using the furlough measures, 8.5% accesing the Coronavirus Business Interruption Loan Scheme, 24% for Bounce Back Loan and 38.8% deferring VAT or other taxes.
Chamber President Lesley Moody said the figures made stark reading – and made clear the challenge of getting the region back on its feet economically.
The North East had been doing well before the outbreak, but had been hit much harder than other areas of the country
She said: “These results show the speed with which this crisis engulfed our economy.
“As a region we entered this crisis with above average levels of unemployment and economic inequality.
“While our survey shows workforce scores falling less dramatically, these are being supported by the Government’s Job Retention Scheme.
“As we have pointed out to Government, downturns are more pronounced in regions such as ours and fall disproportionately on those with the least capacity to withstand them.”
The Government would have to deliver on its promises to adress the economic gap between north and south if the region was to recover.
“We must therefore see a recovery built on principles of fairness, community, sustainability, and opportunity,” the president added.
“The Chamber is ready to play a leading role in this; not just in campaigning for support but also in bringing our business community together to help one another, learn best practice and share new opportunities. It will be tough, but together we can build a stronger North East economy.”