One in 10 British businesses believe they face a “high risk” of going bust due to the coronavirus pandemic, according to a survey.
Around half of businesses questioned said they also believe there is a “small risk” they will become insolvent as vast swathes of the economy remain closed.
The Opinium-Cebr Business Distress Tracker said the data from 500 firms equates to more than half a million businesses which could be pushed under by the lockdown.
A further 250,000 businesses said they would not be able to survive if trading conditions remain as they are for another month and another 1.1 million said they would go bust in three months under current circumstances.
The business impact is felt in almost every region, sector, business size and at almost every level of employmentJames Endersby, Opinium
For those companies with one eye on recovery, bosses said they will need at least six months to return to pre-crisis production levels and one in six said it could take a year to return fully.
James Endersby, chief executive at Opinium, said: “The damage inflicted on UK businesses by the pandemic and lockdown is colossal, and the figures make for very sombre reading.
“The business impact is felt in almost every region, sector, business size and at almost every level of employment. It’s unavoidable.
“With more than a quarter of a million businesses fearing they won’t survive if trading conditions remain as they are for another month, and a million businesses unable to last for three more months of lockdown, the Government’s comprehensive plan to unlock and restart the economy is well-anticipated and desperately needed.”
The survey also found that 88% of businesses have made workplace adjustments due to the current economic crisis, with 35% of employees per business on furlough, on average.
Smaller businesses with under 50 employees have a higher proportion of staff on furlough and there has also been a cut in the number of hours worked.
Pablo Shah, senior economist at Cebr, said: “These figures dash hopes of an immediate bounceback once restrictions are lifted, and instead point to a prolonged period of subdued output that is set to last for a period of years, rather than months.”
A Government spokesman said: “We understand that this is a difficult time for businesses right across our economy which is why the government has put together a far-reaching package of financial support for businesses from all sectors as they face disruption as a result of coronavirus.
“This includes temporary changes to the insolvency rules to enable UK businesses in difficulty to continue trading, giving them breathing space to help them avoid insolvency.”