Spending spree hopes for Super Saturday
CONSUMERS need to feel confident about being able to spend money in order to help the pandemic-stricken economy, it has been claimed.
It is ‘Super Saturday’ tomorrow — the first Saturday in over three months in which cafes, pubs and all shops will be open — and the public has the opportunity to spend their money to deliver an economic boost.
But Brian Murphy, managing partner at business advisory firm BDO, warned that confidence would be critical.
He spoke as a survey conducted by the NI Chamber of Comthere merce and BDO delivered a bleak assessment of business performance and confidence here during lockdown.
Its report on the second quarter showed the deepest plunge in sentiment since the survey began, with Northern Ireland one of the UK regions worst-hit by the lockdown.
Ann Mcgregor, chief executive of the NI Chamber, said: “This survey reflects the fallout of arguably the worst economic and social crisis of our lifetime. In terms of the economy, the vast majority of indicators dropped to historic lows, with declines far exceeding those seen at the height of the global financial crisis.
“The services sector suffered particularly badly, with consumer-facing firms most acutely exposed to economic headwinds from the pandemic.
“The manufacturing sector had a dismal three months, with collapsing demand and major disruption to supply chains weighing on the sector. The unprecedented slump in business cash flow is a key concern as it severely hampers business activity and staff retention.”
Mr Murphy said the economy could be in even graver danger if people don’t have the confidence to spend money. “We have a consumer-driven economy, though we have had 12 to 13 weeks of massive behavioural change and we are all very anxious.”
But he said that with tomorrow dubbed Super Saturday,
was the opportunity to spend to deliver an economic boost.
He added: “If people do not feel confident both from their own personal safety to go out and also from their own economic positions to go out and spend, then the risk is that we will actually create a self-fulfilling prophecy here and we will create a deeper impact and a longer recovery.”
Mr Murphy said that businesses had “fallen off a cliff ” during lockdown when they were forced to close, had no revenue, but still had their usual expenses to meet.
However, Government assistance in the form of loans and the Job Retention Scheme, as well as grants administered through the Executive, had helped.
“Cash reserves were being burnt through at a rapid rate, Government then stepped up with their financial assistant package, both on the employee front and the loans and grants which enabled businesses to stay in the game,” Mr Murphy said.
Firms had also managed to innovate where necessary and change what they do. The JRS, which has paid up to 80% of employee wages since lockdown, had been crucial. However, further job losses are coming as the scheme is wound down.
“If we hadn’t had the JRS we would have had massive redundancies. And there are more in the pipeline, though the JRS has been helping the economy to avoid that,” he added.