North East England Chamber of Commerce’s latest economic survey shows further improvements in business confidence and performance after a tough 12 months, but the headline results mask the ongoing struggles of specific sectors like retail and hospitality.
Despite an improvement from the end of 2020, the results showed many indicators still firmly in negative territory with UK sales at –18.2 points and export sales at –17.9 points. Cashflow for all businesses continues to be a challenge at –18.8 points.
Chamber President, Lesley Moody, MBE (AES Digital) said: “These survey results give us the first picture of what the past year has done to our businesses. From the initial, catastrophic economic shock we saw in the second quarter, through months of uncertainty and ever-changing restrictions, firms in the North East have been through a lot.
“The data from the start of the year shows that overall confidence, while still very low, is improving. Yet this masks enormous disparities between those sectors that have been able to return to something akin to normality and those who remain under the tightest restrictions.
“These results show that businesses foresee a much better year ahead than the one they’ve just endured. However, factors beyond Covid also hinder our firms, as the impact of Brexit on our export performance shows.
“We must not allow this positivity to hide the challenge that now faces us. ‘Levelling up’ has become more important than ever. Our region has been hit hard and must be supported to recover and become more resilient.”
Within the report the most commonly cited factors surrounding businesses success related to the ability to adapt to challenging circumstances. They included the increased use of online technologies, finding new ways of supporting clients and bringing forward innovations.
Respondents also stressed the value they found in customer loyalty and the strength of existing relationships. Businesses praised customers who had stuck with them during difficult times and who had been responsive to new ways of product and service delivery.
The pandemic has altered working lives of most employees and factors associated with staff were also commonly reported including a willingness to work in different ways and being committed to ensuring the business’s survival.
Businesses also reported the benefits of various Government support schemes such as loans, rates holidays and the Job Retention Scheme. Results showed barriers to success were the impact of Brexit, disruption to supply chains due to the new EU trading arrangements and the pandemic. A slump in confidence among customers was also having a detrimental impact as was financial difficulties caused by lack of demand and inabilities to secure new funding at acceptable rates.
Durham University Business School is the associate sponsor of the Chamber economic survey.