Greater Manchester Economy Slows After First Positive Signs, Chamber Survey Says

The August holiday season and additional restrictions imposed in Greater Manchester have contributed to a slowdown in demand, according to the fourth GM COVID-19 Recovery Tracker investigation conducted by the Greater Manchester Chamber of Commerce.

The two Recovery Tracker surveys conducted in July showed improvement in customer demand, cash positions and business confidence from low levels in the spring.

The latest survey results show that current sales have remained stable but advance orders have weakened. Seasonal fluctuations in the main holiday period of the year and restrictions imposed in parts of Greater Manchester appear to have had an impact on economic activity.

Sectors that typically benefit from it during the summer vacation are retail, leisure and tourism. These are among the most affected industries and may not have seen a significant increase in sales. There is evidence that government support programs, such as “Eat Out to Help Out,” have increased restaurant attendance, but since the rebate was not available every day of the week, the program could have moved. demand from the second half of the week to the first.

While it resulted in an increase in footfall in August and helped many restaurants increase their income, it remains to be seen whether the program has had the desired macroeconomic impact. Squeezing sales and revenue remains the main challenge businesses faced during the pandemic, but compared to historic lows during the lockdown, improvement continues.

Subrahmaniam Krishnan-Harihara, head of research at the Greater Manchester Chamber of Commerce, said: “The Chamber’s COVID-19 follow-up investigations show the recovery trajectory of Greater Manchester’s economy after historic economic collapse . Our data has shown that the recovery is moderate and not yet sufficient to pull the UK out of recession. The balances relating to customer demand are still negative and continue to fluctuate between -15 and -20. Not only does this mean that more companies have reported a reduction rather than an improvement, but it also shows a short-term stabilization in business activity. Full recovery takes some time.

“Now that the ‘Eat to Help’ program is over, hotel companies will particularly look forward to the current easing of restrictions in some boroughs. Other government programs are also being phased out or reduced in support, and may have an impact. impact on business. But there is good news: Cash positions are stable. Businesses are more confident about improving their revenues, but margins appear to be low at the moment. “

Data from the latest Recovery Tracker also reveals emerging employment challenges. Many large retail chains have already announced store closures and job cuts. The survey results show that job losses are not confined to the retail and hospitality sectors, with businesses in many other sectors starting to be affected. Further improvement in demand and liquidity is essential for business investment and job maintenance.

Subrahmaniam added: “The survey results show that the prospects for a recovery are muted. The companies have not reported any substantial increases in sales and revenue over the past six weeks. As a result, we have revised the outlook for recovery. There is great concern that the recent increase in infections may require the imposition of more restrictions. The pandemic is both a public health crisis and an economic crisis and the government must not exclude support for companies that are suffering the repercussions of local containment. Without further improvement in economic activity, there is the risk of a prolonged period of economic stagnation. This can only be avoided with additional support and we call on the government not to jeopardize the nascent recovery. ”

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