TUMBLING sales and dwindling cash flow is hammering business confidence among West Midlands firms, a new report from three Chambers of Commerce has revealed.
According to West Midlands Quarterly Economic Snapshot, a massive 72 per cent of businesses reported a dip in domestic sales in the second quarter of this year – over five times higher than in the last quarter of 2019.
The study uses data collected from quarterly surveys conducted by Coventry and Warwickshire Chamber of Commerce (CWCC), Greater Birmingham Chambers of Commerce (GBCC) and Black Country Chamber of Commerce (BCCC).
The report also detailed how exporters are struggling from the economic fallout of the coronavirus pandemic, with just eight per cent reporting an increase in international sales compared to 60 per cent who had experienced a drop.
Just eight per cent of businesses surveyed expect international output to increase over the next three months.
Struggling sales as a result of the crisis is stifling cash flow for many, with nearly two thirds of the businesses (63 per cent) reporting a decrease.
However, the number of businesses likely to raise their prices has been halved, with only nineteen per cent anticipating price increases compared to 38 per cent in the final quarter of 2019.
Gloomy sales and cash flow forecasts are hampering business confidence in the region, with 52 per cent of firms expecting profits to decrease in the next year and 52 per cent expecting turnover projections to also dip in the same period.
Paul Faulkner, chief executive of the GBCC, said: “It will come as no surprise that business confidence has nosedived dramatically this quarter with over half of the firms surveyed expecting their turnover and profitability to fall over the next 12 months.
“To put this in perspective, the number of firms expecting their turnover and profitability to decrease over the next year has risen by 41 per cent and 39 per cent respectively on this time last year.
“While the level of government support for businesses to date has been unprecedented, there are still too many businesses that have fallen through the cracks.
“We would like to see sector-specific support for the hardest hit industries that are yet to reopen and enhanced needs tested grant funding for local businesses that currently fall outside of government support schemes.
“It is also vital the government secures a comprehensive free trade agreement with the EU and invests in business support programmes to end the perennial uncertainty and give business the confidence to adapt to any forthcoming changes.
“Here at the Chamber we will continue to support businesses throughout this difficult period and keep them informed over the weeks and months ahead.”
Visit https://tinyurl.com/yddqt6qf to read the full report.