By Kristy Dorsey

Commercial conditions across the UK have not improved by any appreciable margin since the second quarter of 2020 when the Covid pandemic first plunged the economy into turmoil, a leading business group has said.

The quarterly economic survey produced by the British Chambers of Commerce (BCC) found that business conditions remained close to historic lows in the final three months of last year as a second round of lockdowns in England and Northern Ireland, together with tougher restrictions in Scotland and Wales, squeezed activity. Nearly half of firms (43 per cent) reported decreases in domestic sales, while 38% reported falling export sales.

Consumer-facing businesses suffered the largest declines, with 79% of those in the hospitality and catering sectors reporting falling sales. However, firms that have continued to trade throughout the pandemic also struggled, with a larger proportion of these businesses also reporting lower sales.

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Adam Marshall, director general of the BCC, said the latest major lockdown across all four UK nations will compound the gloom for many businesses that were already struggling with the effects of the pandemic and are now adapting to new trading conditions following the end of the Brexit transition period.

“For business, the pandemic doesn’t end simply because vaccines are starting to be delivered,” Mr Marshall said.

“Brexit isn’t ‘done’ either. The sooner the Prime Minister and his colleagues set out a coherent economic plan and longer-term support to help businesses to restart, rebuild and renew, the better.”

While manufacturing firms had a “moderately” better end to 2020, the BCC said this was likely a temporary boost from Brexit stockpiling rather than evidence of recovery. Investment intentions remain weak across all sectors, with 35% reporting lower spending on plant, machinery and equipment.