The news of a Covid-19 vaccine gave business confidence in Coventry and Warwickshire a shot in the arm coming into 2021, according to a regional survey.
The Coventry and Warwickshire Chamber of Commerce’s Quarterly Economic Survey (QES) acts as the barometer for business sentiment across the region and feeds into the national statistics collated by the British Chambers of Commerce (BCC).
The survey, which is delivered in partnership with Prime Accountants Group, is analysed by the Economy & Skills Group at Warwickshire County Council. Its analysis uses a similar score to the national Markits Purchasing Managers Index (PMI) where 50 is the balance and anything above means the majority feel positive and anything below means the reverse.
The final survey of 2020 saw business confidence increase dramatically in both the manufacturing and service sectors. In the service sector it jumped to 67.9 from 54.4 and in manufacturing it hit 71.0, bouncing back from 47.7 in the third quarter.
It was a dramatic rise after a year of record low confidence among businesses in the region brought on by the Coronavirus crisis.
All measures that create the overall economic outlook for the region had risen from the previous quarter – although some still remain below the crucial 50-mark.
It meant that the final economic outlook for Coventry and Warwickshire in 2020 was 51.5 which was the first time it was in positive territory since the crisis took hold.
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “There is no doubt that the emergence of the vaccine in the final quarter of the year gave businesses more confidence coming into the New Year.
“However, the survey was conducted before the discovery of the new variant of Covid-19 and the chaos that ensued with the UK borders closed and before the final outcome of Brexit.
“So, while it is good to see businesses feeling more upbeat about their prospects in 2021, there is still a long way to go before normality returns.
“Businesses in Coventry and Warwickshire are going to need support to reach a time when the world feels like it is returning to some kind of normality – and then further help to get back up to speed as the economy emerges from this pandemic.
“We’d encourage firms across the region to make full use of the support available at the Chamber to help them to survive and then recover and grow when the opportunity arises.”
Steve Harcourt, of Prime Accountants Group, said: “As the toughest year many businesses have ever had to face came to an end, it was clear that the imminent announcement of the vaccine rollout had a positive impact on the outlook held by business leaders in Coventry and Warwickshire, however this was before the new, more infectious strain emerged.
“Assuming the vaccine is effective against this new strain and the spread is reduced by the third lockdown we have entered, we should remain hopeful that this positive outlook will become reality, as we head towards normality, or what will be the new normal.
“With the Brexit deadline approaching during Q4 and a light at the end of the tunnel in regards to Covid-19, we can see that a majority of respondents to the survey predicted business to improve in the next 12 months, and in the short term, 93 per cent of businesses expected their sales to rise, or remain the same.
“With only seven per cent predicting decreases prior to the third lockdown, we can hope that despite the new challenges, the outlook remains promising for the majority. Export sales for many were expected to stay consistent or increase, with a third predicting a decrease, a figure that was to be expected whilst uncertainty surrounding the Brexit deal continued throughout Q4.
As we head into 2021 with a Brexit deal finally in place and hope that the destruction caused by Covid-19 will begin to be repaired for those who were fortunate enough to continue in business, we can only hope that this year will eventually return to pre Covid levels in the economy.
“However, a few hurdles still remain at present; the impact of the third lockdown, the end to the furlough scheme and other Government support schemes being phased out. With a resilient local economy being more optimistic than the national average, there is a real sense of pent-up demand to be realised and progress to be made in Coventry and Warwickshire.”
Pictured (taken before the pandemic): Louise Bennett with Steve Harcourt