Highlands and Islands businesses have lost confidence in the local economy after the Covid-19 pandemic left it in a state of ruin.
Thousands of companies across the north were forced to close their doors to trade in March as the deadly virus took hold across Scotland.
Now as firms begin welcoming customers through their doors once again, entrepreneurs have confirmed the extensive lockdown has left them on their knees reporting stark disruptions to trade, a decline in sales and a substantial loss of income.
In Highlands and Island Enterprise’s 16th business panel survey, conducted in June, findings showed 79% of businesses had begun losing faith in the market over the last six months, marking the biggest decline since the survey’s inaugural commission in 2014.
Analysing the implications of the pandemic, 85% of businesses experienced a decline in trade with 24% generating no sales at all, however, just 4% of firms reporting an increase on trade as they continued operating during lockdown.
More than two thirds (70%) of firms applied for financial support through the Scottish government to help keep their business afloat, with 91% of those proving successful in receiving assistance.
Charlotte Wright, chief executive of HIE, said: “As expected, the survey shows there have been many severe impacts across the Highlands and Islands and the road to recovery is a long one.”
Business owners have also raised concerns on the implications going forward with 61% fearful of an economic downturn and 25% worried about the sustainability of their business.
More than half of businesses (55%) also confirmed they were fearful for future waves of coronavirus and the implications caused by another lockdown period.
Despite the challenges ahead, around 75% of respondents believe their businesses will remain viable in six months.
Mrs Wright added: “We particularly welcome the confidence that many firms have in their own future and that they expect to have the resources they need to get through the crisis. This is typical of the prevailing can-do optimistic attitude of so many in the region; qualities that will be vital in rebuilding the economy.”
Stewart Nicol, chief executive of Inverness Chamber of Commerce, said the reactions from Highlands businesses was “understandable” given the climate but he was optimistic the industry would return triumphant.
He said: “It’s a completely understandable reaction from the Highland business community. I have often said and I continue to say it, the Highland economy is increasingly diverse and resilient and this will put that to the test.
“This is something that is testing us on every level of society in a way that nothing has so far so its no surprise that businesses have had a real knock in confidence.
I think the diversity of our business activity and the resilience that we have shown over many years and decades puts us in a good place to move forward but it none the less it’s a stark reminder of big the hit on business has been.”
