Coronavirus 'has dealt West Midlands economy its biggest ever blow'
The blow to the economy from coronavirus has been the biggest ever seen by Black Country businesses, a commerce leader says.
The UK economy suffered a record slump in April, with GDP plunging by 20.4 per cent.
Many of the region's businesses were shut after the Covid-19 pandemic hit in March in a bid to curb the spread of infection.
The economy was around 25 per cent smaller in April than it was in February, bringing the threat of mass job losses.
Black Country Chamber of Commerce chief executive Corin Crane said: “Whilst not unexpected, these figures are ahead of the analysts’ worst projections for the first full month of lockdown.
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“What is clear is that the scale of Covid-19, and the effects on the economy will be bigger than most businesses have seen in their lifetime.
“We will continue to work hard for our members and the local business community to ensure that the region is in a strong position to continue to fight the pandemic and the economic uncertainty ahead.”
British Chambers of Commerce head of economics Suren Thiru said, “With lockdown restrictions gradually easing and shops beginning to reopen, April is likely to prove to be the low point for the UK economy. However, any prospect of a ‘V-shaped’ recovery remains unlikely, with many sectors continuing to operate at reduced capacity.
"Some firms, including those in our hospitality, leisure and tourism industries, may remain closed for some time and will require flexible and open-ended government support to weather the economic storm.
Kickstart
“Over the coming months, further action will be needed to limit the long-term economic damage and kickstart a recovery, including close gaps in government support and providing incentives to help stimulate consumer demand and business investment. Establishing air bridges between countries with low infection rates would provide a much-needed boost to key parts of the UK economy.”
Alpesh Paleja, the Confderation of British Industry's lead economist, said: “This data confirms what we already knew – that the economy was hit hard as it entered lockdown. Our business surveys suggest that activity hasn’t fared much better since.
“The Government has listened to businesses’ needs, and reflected them well in the schemes currently in place. Going forward, both the Job Retention Scheme and financing support programmes should remain agile and responsive to the evolving economic situation.
"This will leave us well placed to build an ambitious vision for our economic recovery, one that prioritises jobs, investment and tackling pre-crisis inequalities across our society.”
Gareth Prince, partner at corporate recovery specialists Begbies Traynor in Birmingham, said: “These stark figures lay bare the scale of the challenge facing West Midlands businesses.
"Before the pandemic had even hit, our own figures pointed towards thousands of Midlands firms already in significant financial distress. Following the paralysis of the first full month of lockdown when so much of the economy was unable to operate, sadly many more businesses are now likely to be in a similar predicament.”
