Second COVID-19 Recovery Tracker shows signs of economic recovery

There are signs of a nascent recovery after the COVID-19 pandemic caused a historic collapse in the local economy, according to the second GM COVID-19 Recovery Tracker survey conducted by Greater Manchester Chamber of Commerce.

The Chamber's COVID-19 tracker surveys have showed dramatic reductions in customer demand across all sectors. Liquidity has been a major concern for businesses, resulting in business confidence being at its lowest ever levels.

The latest survey results show that there has been a small improvement in customer demand measures relative to the levels recorded in April and May. However, the balances relating to customer demand are still negative, which means more businesses reported reductions rather than improvements. The reduction in sales and revenues remains the primary challenge that businesses have been facing during the pandemic but compared to historic lows during lockdown, there is continuing improvement.

Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce, said: “The Chamber's COVID-19 tracker surveys shows how Greater Manchester's economy has changed during the COVID-19 pandemic. After the historic economic collapse, things are beginning to look better and there is cautious optimism amongst businesses."

With the increase in customer demand and revenues, cash flow positions have improved. Nearly 40% of businesses now report being confident about increasing their turnover and margins in the coming months.

Subrahmaniam added: “The improvement in cash flow positions is particularly encouraging because this could help business investment and preserving jobs. In June, the balance relating to cashflow was -53.7. It is now -16, a marked improvement. There is a lot of bad news in the survey, but there are signs of some good news coming through as well, especially in the last few days. Various factors have contributed to this: with restrictions easing, customers could have resumed operations and paid pending invoices. Moreover, the HMRC has speedily processed most claims relating to furloughed staff.

“The data confirms our view that there will be a ‘tick-shaped’ recovery rather than a rapid ‘V-shaped’ recovery as suggested previously. This means we expect the recovery to be gradual and steady rather than a sharp upturn.

"Although the restrictions imposed recently to lower the infection rate will add to business anxiety, I would expect the short-term outlook to be more or less on target provided there is no second wave of infections that require a full lockdown to be implemented."

Fieldwork for the second GM COVID-19 Recovery Tracker was conducted between 16th July - 31st July and received 90 responses.

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About Greater Manchester Chamber of Commerce

Greater Manchester Chamber of Commerce is the largest Chamber of Commerce in the UK, providing business support to approximately 4,500 members who collectively employ 446,000 people, around one-third of Greater Manchester’s workforce. Recognised as a leader in its field, Greater Manchester Chamber’s reputation in government circles has grown locally and nationally. At the heart of the area of greatest economic intensity outside London and the South East, the Chamber is the primary body for business support, policy, representation and networking. The Chamber is an independent, not-for-profit private company and its aim is to support businesses and help create the best climate for the region to prosper. This is achieved by ensuring that those taking decisions on key issues such as transport, taxation and business regulation hear the voice of our members. The representation of our members’ views is central to the work of the policy team at the Chamber; these views are gathered in a range of ways including our local councils, policy committees, sector councils, the main Chamber council, focus groups, meetings with politicians and consultations. The Chamber also offers a range of networking forums across Greater Manchester, free as part of membership, plus a variety of other events and services designed to benefit specific sectors or individuals and help businesses to grow.