Only half of businesses prepared to return to pre-crisis levels after lockdown lifts
Fewer than half of British businesses think they will be able to operate at pre-crisis levels if the economy opens up again with social distancing rules still in place, a new survey has revealed.
In a questionnaire by the Institute of Directors (IoD), around one in six buinsess leaders said they would be able to operate at less than half of their pre-lockdown levels.
The survey found that 6% of businesses think they will be totally unable to operate viably with social distancing in place. Some 23% said they would operate at between 50% and 100% of previous levels.
Only 49% said they could return to pre-lockdown levels, the IoD found.
“Organisations that can adapt will take time to start firing on all cylinders, particularly as demand across the economy continues to lag. Businesses may face another cashflow crunch as they spend money on measures to make workplaces safe before revenues return,” said IoD director general Jonathan Geldart.
A third of businesses said they could restart some activities within a week after lockdown lifts if demand picks up.
However, 42% said it would take more than eight weeks to get back to pre-lockdown levels of activity.
The survey raises serious questions about getting the economy back on track as a third of businesses said they are waiting for guidance from the government on what to do when lockdown eases.
Mr Geldart said: “Leaving lockdown, when it happens, won’t be plain sailing for business. Social distancing presents an unprecedented challenge for firms and some may be simply unable to make it work.”
He called on the government to ensure that businesses’ growth plans are not held back by the debt they have taken on to stay in business during the coronavirus crisis.
“This is a time for innovative and agile policymaking. Many small firms may need support accessing protective equipment to get up and running again,” he said.
“Employers will need flexibility as the furlough scheme is unwound to manage the return to work.”
The IoD surveyed 816 directors during the first six days of May.