Leicester lockdown – economic commentary

Data from Dun & Bradstreet’s Covid-19 Impact Index shows that the probability of default for businesses in Leicestershire is 1 percentage point higher than the national average (2.5% compared with 1.4%). Markus Kuger, Chief Economist at business decisioning data & analytics firm, Dun & Bradstreet: “The introduction of stricter lockdown measures in the city will be heavily scrutinised as local authorities try to balance minimising the spread of COVID-19 with limiting the negative impact on local businesses starting on the road to recovery after the national lockdown.

“According to our COVID-19 Impact Index, which assesses business risk and disruption at a regional level across England, Wales and Scotland, the probability of default in Leicestershire is over 1 percentage points higher than the national average (2.5% compared with the national average of 1.4%). This is particularly concerning given 96% of businesses in Leicestershire are small and medium enterprises (SMEs) and are more likely to be negatively impacted by the continued restrictions and economic slowdown. A survey Dun & Bradstreet commissioned before the pandemic found nearly three-quarters (73%) of SME respondents believed the government could do more to support small businesses and government-backed loan schemes will be more important than ever for businesses as they face more disruption to demand and supply.

“The impact of any local lockdown measures in the UK will depend on the size and economic role of the area in question. Even small scale lockdowns in remote areas can have a significant ‘ripple effect’ on supply chains as we saw earlier this year when the European automotive industry was impacted due to the disrupted supply of essential parts manufactured in a small town in Northern Italy. Analysing the supply chain data available will be key to assessing risk and business continuity planning. Dun & Bradstreet is maintaining a deteriorating outlook for the UK economy and support for small businesses and the effective use of data and analytics will be critical to ensure survival through these turbulent times.”