Three quarters of small and mid-size firms expect Covid-19 to have a ‘significant impact’ for months to come – but green shoots of recovery are sprouting already
- Business sentiment plummeted 31 points during the quarter to 79 out of 200
- A Simply Business report found that Covid-19 has cost SMEs a total of £69billion
- Recent Barclaycard research found that consumer spending sank 36.5% in April
Most small and medium-sized firms believe the coronavirus will continue to have a major effect in the coming three months, despite indications from a new survey that business is recovering already.
It also found that 82 per cent of UK SMEs had been negatively affected as a result of the Covid-19 disease, while overall revenue is expected to tumble by 28 per cent in the second quarter and by just over 5 per cent in the coming year.
However, the study’s author Barclaycard Payments said there are ‘early signs’ that industry is beginning to display signs of improvement.
Overall revenue for SMEs is expected to tumble 28 per cent in the second quarter
They discovered that there had been a 24 per cent jump since early April in the number of SME clients that were accepting payments.
It also found that only around a fifth of all SMEs thought the virus would continue to have a ‘significant impact’ in the coming 12 months, as opposed to 73 per cent who expect a ‘significant impact’ over the next three months.
In addition, nearly two-thirds declared that they were planning to make investments in their company in the upcoming year, with advertising, and modern equipment and machinery likely to receive funding.
‘It’s encouraging to see small and medium-sized businesses starting to come online again after the start of lockdown,’ wrote Konrad Kelling, Barclaycard Payments’ Head of Small Business Acquiring.
He added that ‘while we don’t expect an overnight recovery, the resilience and perseverance of small businesses gives us hope as we look towards a more optimistic view in the next 12 to 24 months.’
A considerable downside observed by the credit card brand’s survey was the 31 point drop in business sentiment during the quarter to 79 out of 200 points. Any number beneath 100 denotes a negative sentiment.
A report published today from small business insurer Simply Business found that the coronavirus has cost SMEs a total of £69billion and that two-fifths are in danger of closing
The hospitality and leisure industry had a business sentiment score of 69, while retail, and the health services and education sector had scores of 71 and 72 respectively.
Barclaycard’s research comes on the same day a report issued by small business insurer Simply Business found that the coronavirus has cost SMEs a total of £69billion and that two-fifths were in danger of closing.
Fourteen per cent meanwhile stated that they could shut down in the next three months. Another 4 per cent of small business owners announced they had stopped trading for good.
The hospitality and leisure industry had a business sentiment score of 69, while retail, and the health services and education sector had scores of 71 and 72 respectively
Simply Business’s UK CEO Alan Thomas remarked: ‘No business has been able to escape the impact of the pandemic – and that’s no different for small businesses and the self-employed.
‘Yet they are the lifeblood of the economy, and with many of these at risk of permanent closure, so much is at stake for our local communities and wider economy.’
Barclaycard’s analysis comes a fortnight after it revealed that consumer expenditure sank 36.5 per cent in April.
Bars, pubs and clubs saw spending fall 96.9 per cent, the largest decline of any sector. The accommodation and restaurant trade also experienced a drop of more than 90 per cent.
YouGov conducted the second of Barclaycard Payments’ SME Barometer survey, which involved 576 high-ranking staff members working for UK SMEs being interviewed between April 1 and 21.