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Business & Economy

NE1 survey shows 75 per cent of firms could go bust if lockdown last more than six months

A survey of businesses in Newcastle City Centre shows that 75 per cent could go out of business if the lockdown last for more than six months.

Conducted by NE1, the business improvement district company for the city, the survey reveals just how severe the impact of coronavirus could be on the local economy.

56 per cent of respondents said they had mothballed their operations and have temporarily closed and only 2 per cent of businesses are operating as normal.

59 per cent said they had seen a drop of between 81 and 100 per cent in turnover since the lockdown measures were introduced.

NE1 said the figures emphasise how important it is for the Government to handle the next chapter of the crisis sensitively.

It is thought that how the Government manages the lifting of restrictions will determine whether many businesses and jobs survive.

Not surprisingly, businesses in the food and beverage sector warned that social distancing would cut capacity by between 40 and 90 per cent in some venues, making reopening not financially viable.

The biggest concerns of businesses in the survey were the duration of lockdown and how social distancing will work in a business environment.

As such, firms expressed a need for clear guidance from Government, as well as continued support while restrictions are gradually removed and a collaborative effort between local stakeholders and the general public to welcome people back to the city safely.

67 per cent of businesses think Government assistance has been effective or very effective so far – but has bought time not provided a solution.

Adrian Waddell, chief executive of NE1 Ltd, said: “The research shows that Newcastle’s business community is in a fragile state. Coming out of lockdown will be much harder than going into it and needs to be handled very carefully, including with on-going business support.

“The Government needs to get the lockdown easing right if Newcastle businesses are to make it through.

“To date the Government’s support has helped by buying time but it has only delayed decisions that could inevitably lead to job losses and company closures along the way.

“We need a measured, phased plan for easing restrictions and getting the nation back to work. But the survey shows that timing is crucial.

“There is a very fine line between protecting the nation’s health and protecting its jobs and long-term economic survival.

“The message from Newcastle’s business community is clear; Government support needs to be flexible, targeted and adaptable as businesses begin to reopen and get back on the path to profitability.”