27 March 2020

Welcome to the first of my regular blogs which will set out the huge impact that COVID-19 is having on the economy of the Coast to Capital area.

In this blog I will share stories from businesses and sectors struggling to keep afloat despite the response from Government.

 

Our Growth Hub team are working hard to support businesses and we are pleased to be launching a new 'Backing Business Grant' fund of £2 million to support small business to adapt, evolve and innovate in response to these challenging time. To ensure we can help provide the best support to the economy during these difficult times and speak as one voice as a region we want to hear as many stories from businesses as possible.

 

Impact on the businesses centred around Gatwick Airport and the aviation based economy

 

The financial position of airlines and Gatwick Airport have been clearly communicated to Government. It is not possible for these companies to continue to delivery their business plans when global travel is restricted because of the impact of the virus. Firms are furloughing staff, making redundancies and making use of the available Government support. It is widely reported that airlines and airport operators across the UK are looking for specific financial support although none is so far forthcoming. Gatwick Airport will consolidate operations into the South Terminal from 1 April and limit runway opening hours to protect staff, passengers and the business from the impact of COVID-19.

 

Pre-COVID-19 the airport directly employed 23,800 people and supported another 60,000 jobs in the wider UK economy. It is our single biggest driver of economic growth, contributing £1.6 billion directly to the Gatwick area, supporting a total £2.7 billion GVA in the Coast to Capital economy and a total £5.3 billion GVA in the UK economy through wider supply chains. This significant wider regional economy which supports the operation of the airport which is also being hit hard.

 

"We have heard that an upmarket hotel chain in Crawley has closed three hotels and is asking all 150 members of staff to take two weeks unpaid leave."

 

We are looking for more stories from the wider aviation reliant supply chain around Gatwick Airport including airline service companies (eg catering, cleaning, staff recruitment agencies, training providers), other companies operating at the airport (eg ground handlers, retail) and the wider supply chain (Crawley hotels, taxi firms).

 

Impact on wider service-sector industries

 

The region is home to a significant number of service industries which rely on discretionary consumer spend. Many of these are in the tourism, leisure, retail, hospitality sectors - others reflect the region's natural strengths in the Consumer Durables and Information Technology (CDIT) and other sectors. These firms appear to be very significantly affected by the effect of the virus. Numerous businesses are reporting that they are short of cash, many appear to be wary of applying for Government support to furlough workers and are laying them off instead. There is also a level of uncertainty about how to apply for access to wider loan funding, and a certain level of reluctance to take on further debt at this time. Self-employed and gig/ casual workers in the region are suffering the same level of financial distress as others around the country.

 

"My client manufactures products for the leisure industry, predominantly skateboard parks, and orders have dried up."

"A design company in Brighton has let me know they have cancelled a festival they were planning in April as a launch platform for the business. They are massively concerned at how they are meant to survive this from a financial perspective."

"For the first time in 7 years my client have had several days where no one has come into their gallery based in Brighton."

 

We are looking for more stories from the economic hubs of Brighton and Chichester as well as the picture for the high streets across the region.

 

We have had sight of data that suggests that our area is amongst the worst hit regions and we are suffering disproportionately. For my next blog I am particularly interested in hearing stories about and will be discussing:

 

  • The potential challenges that will be faced on the return to work. What is the impact of blanket restrictions on working people? What will be the impact of EU nationals returning home?
  • The investment and support will be needed to support recovery. Is this infrastructure? Or help for people to retrain? Or sector interventions?

We want to hear from you

 

We need as much up-to-date business intelligence as possible so please:

 

 

Jonathan Sharrock,

Chief Executive at Coast to Capital

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