Companies in London and Wales bear the brunt of restrictions

Businesses in London have been most impacted by the Covid-19 pandemic, with commuters and visitors avoiding trips to the capital, according to a new study.

A report by the Centre of Economics and Business Research (CEBR) has led to the creation of the Covid-19 Business Impact Tracker, which looks at how businesses have coped with tougher trading conditions as a result of the pandemic.

Commissioned by energy supplier E.ON, the tracker started with a baseline score of 98 at the beginning of the year while under normal economic conditions.

The data indicates London appears to be feeling the longer-term effects most significantly – averaging a score of 47 over that late summer and early autumn period.

Wales saw the biggest decline in business activity in October, dropping five points on the Tracker, from 54 to 49, as it headed into its ‘firebreak’ lockdown in the month before England entered its second lockdown.

But while Wales has not returned to pre-Covid levels, the economic impact was not as significant as in the first lockdown which saw a fall from 95 points in February to 17 points in April.

There are other signs of businesses showing greater resilience to restrictions – areas such as the North West and the East Midlands, which were subject to tougher local rules over the months before the second nationwide lockdown, have stabilised as the year has gone on, according to the tracker.

The Covid-19 Business Tracker also shows that some industries were impacted more than others.

More than one in five (22%) businesses in the arts, entertainment and recreation sector paused trading in October and, as the worst impacted sector, it is no surprise that a third (34%) of businesses in the industry saw their turnover fall by more than half. Accommodation and food services businesses were affected nearly as hard, with a fifth (18%) reporting they paused trading in October.

The report also reveals businesses have seen a downturn in energy use caused by lockdown as a short-term trend.

‘This research shows that despite challenging operating conditions, companies across UK industries have shown incredible resilience during the pandemic,’ said E.ON chief executive, Michael Lewis.

‘While the landscape remains complex, energy use provides a useful insight into how companies are adapting.

‘It’s understandable that businesses have focused on the immediate threat but as we hopefully emerge from the worst of the pandemic companies must now invest in a green economic recovery, not only to protect their bottom lines but to help alleviate the next looming catastrophe: the climate crisis. This research shows that both government and the energy industry must also find a way to remove some of the barriers – notably cashflow and payback periods on investments – and work together with businesses to deliver a recovery which makes economic and environmental sense.’

Photo Credit – Wndj (Pixabay)