GM Covid-19 Recovery Tracker warns of Tier 3 dent to economy

The latest GM Covid-19 Recovery Tracker survey, produced by Greater Manchester Chamber of Commerce (GMCC), has found businesses in the city-region have reported a decrease in customer demand in the first three weeks of October ahead of the imposition of Tier 3 pandemic alert measures.

When compared with Q3 figures, the GM Covid-19 Recovery Tracker indicated a significant decline in sales and advance orders from UK customers. GMCC reported that gains made from the easing of national lockdown in June/July were now negated by measures introduced in Greater Manchester at the end of July, and tightened further with the October introduction of Tier 3 restrictions.

Businesses in the Greater Manchester are reporting worsening cash positions since September as demand falls, highlighting the severe economic impact of tightened restrictions on economic activity without additional support measures. Nearly half of respondents to the GMCC survey reported a reduction in sales in the first three weeks of October.

Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce, said:

The Chamber’s sixth COVID-19 tracker survey shows that the local economy has lost steam, and the recovery trajectory is weakening. Now, business owners are very anxious about there being no discernible pick-up in sales and revenues. Many business owners have also reported that the messaging around the imposition of restrictions and what curbs are in place has been unclear and confusing. As a result, there is also a lot of uncertainty around what safety measures to implement. Anxiety around rising infections has dented consumer confidence. The Government has also encouraged people to work from home, which will affect the recovery of town centres.” 

GMCC also warned of the potential for rapidly rising unemployment as the furlough scheme comes to an end at the end of October in an environment of falling sales. Subrahmaniam added:

We need to keep a close eye on possible redundancies and employment numbers. The full effect of the end of the furlough will be known only in November although the new Job Support Scheme is likely to cushion the blow. Depressing as it is, we have again revised down the short-term economic outlook to reflect the latest survey results. Current levels of most indicators are much lower than initially expected and indicate a degree of stagnation in the economy. The best-case scenario is a pick-up in demand during the key festive trading season although the then infection rates will pay a big part in consumer confidence. 

“Since August, GM Chamber has been calling for additional business support, especially to avoid an unemployment crisis. We are pleased that the Chancellor has announced some changes to the Job Support Scheme. The measures announced last week are a significant increase in available support, but more may be needed if the festive trading season turns out to be a challenging one as many business leaders fear it might.”