The government must set out its lockdown exit plans to restore confidence among British businesses that have become increasingly bleak about the economy’s future, a leading employers’ group has warned.
The Institute of Directors said its 28,000 members were “clamouring” for information so they could start drawing up return-to-work plans. Jon Geldart, its director general, said it was in everyone’s interests to kickstart the economy again once it is safe to do so.
“Directors from all parts of the UK need to make plans for riding out this tempest, but they can’t get very far if they have no idea what will be happening in a few weeks’ time,” Geldart said.
“Business leaders know [the end of restrictions] will not happen all in one go, but that’s why it’s even more important to tell them what they need to prepare for.”
A poll of the IoD’s members showed they were more fearful about their company’s future than at any point since the Brexit vote, with business leaders pessimistic about the fortunes of their firms well beyond the current lockdown. Their investment intentions were also at a record low, with revenue and employment for the next 12 months expected to fall dramatically.
The bleak business outlook came amid tentative signs of economic life as companies, including builders, retailers and fast-food restaurants, prepare to reopen after devising new safety regimes.
Housebuilders Berkeley Group, Bellway and Barratt have signalled plans to get back to work. Berkeley will restart work at 80% of its sites this week, while Bellway will return to about 100 – roughly a third – of its sites on 4 May. Barratt intends to be up and running in a fortnight’s time.
Retail Timpsons, the family-owned cobblers, will this week reopen 40 shops that are located inside supermarkets. The move follows Homebase’s reopening of 20 stores this weekend and last week’s move by B&Q to resume trading at 155 outlets. Builders’ merchants Travis Perkins and Wickes are also expected to begin store trials.
Fast food Leon, the restaurant chain, is to reopen another six London sites as takeaways, adding to the 16 already trading. Pret a Manger and Burger King are also planning to reopen more branches.
Travel Wizz Air has become one of the first airlines to resume flights. On 1 May the budget carrier is reopening its Luton airport base for flights to European destinations including Portugal and Spain.
With the lion’s share of UK businesses forced to close in order to comply with lockdown, parts of the economy have come to a virtual standstill. The manufacturing and services industries suffered a record collapse in trade in April, while the picture from the high street is also grim, with predictions that sales could be down as much as 30% as Britons stay away from the shops.
With the gloomy data piling up Gertjan Vlieghe, a member of the Bank of England’s interest-rate setting committee, said last week that early indicators pointed to an economic contraction “faster and deeper than anything we have seen in the past century, or possibly several centuries”.
For the first time since the IoD started the survey four years ago, the poll of directors’ views on the outlook for their companies over the next 12 months delivered a negative reading. While 24% of the IoD survey’s 1,003 respondents were positive about their company’s future, the number who were pessimistic was 46%, resulting in a net negative balance of 22%. Its measure for the economy as a whole was also dire, with a negative reading of 69%, the lowest ever recorded by the monthly survey.
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