COVID-19 will have a bigger effect on the North East than the late 2000s financial crash, according to a new survey.
The North East Chamber of Commerce has published the results of its poll for the second quarter of 2020, revealing the impact the pandemic has had on the local economy.
Sales for the manufacturing and service sectors have fallen to record lows of -54 per cent and -63 per cent respectively, worse figures than those reported during the financial crash.
Cash flow was also at at an "unprecedented" negative level of -48.2 per cent.
Almost all respondents had accessed Government funds with with 65 per cent using the furlough measures, 8.5 per cent the CIBLS loan, 24 per cent Bounce Back Loan and 38.8 per cent deferring VAT or other taxes.
North East England Chamber of Commerce President Lesley Moody, said:
These results show the speed with which this crisis engulfed our economy. As a region we entered this crisis with above average levels of unemployment and economic inequality. While our survey shows workforce scores falling less dramatically, these are being supported by the Government’s Job Retention Scheme. As we have pointed out to Government, downturns are more pronounced in regions such as ours and fall disproportionately on those with the least capacity to withstand them.
Commenting on the survey Chamber member Rockliffe Hall Hotel, Golf and Spa’s managing director, Jason Adams, added:
The furlough scheme has been very welcome and our team is particularly fortunate that our owner has topped everyone’s salaries up to 100 per cent. Looking ahead with the furlough scheme, I think there needs to be something put in place beyond October for the hospitality sector. Now the Government has given the go ahead for hotels to reopen on July 4, when the social distancing rule will be been reduced to 1m, we can finally start planning and implementing new procedures. The most complex area of our business is the spa and gym and until Tuesday’s announcement, we thought they may have been included in the July 4 reopening. We’ve now been told this is definitely not the case and that’s a huge blow to the business with many of our guests telling us they visit Rockliffe Hall primarily for the spa.