By Ian McConnell

SCOTTISH private-sector output plummeted at the fastest pace since the depths of the 2008/09 recession in the first quarter amid the developing Covid-19 coronavirus crisis, with an even more precipitous fall projected over coming months, a survey shows.

The latest business monitor from the University of Strathclyde’s Fraser of Allander Institute and law firm Addleshaw Goddard shows, of nearly 500 Scottish-based businesses surveyed between April 1 and 8, only 22 per cent reported a rise in business volumes during the first quarter and 46% posted a fall. The remainder reported an unchanged position.

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The balance of 24% posting a fall in business volumes signalled the sharpest decline in activity since the first quarter of 2009, in the depths of the global financial crisis.

Contemplating the outlook for the next six months, 80% of respondents projected a fall in business volumes and only 10% anticipated a rise.

The balance of 70% expecting a decline is the bleakest projection since the monitor began in 1998.

When asked how long they could survive under current levels of trading, 54% of those who knew said less than three months while a further 32% said four to six months.

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Of those surveyed, 89% stated their turnover had been impacted since the beginning of March because of coronavirus.

The UK has been on lockdown since March 23 in an attempt to slow the spread of coronavirus.

Economists from Fraser of Allander noted the scale of the downturn actually reflected the success of the shutdown in the economy to protect public health.

More than 95% of businesses believe the coronavirus job retention scheme put in place by the UK Government will be “effective” or “very effective” in supporting their survival during the pandemic. This sees the Government pay 80% of furloughed employees’ wages and salaries up to £2,500 per month.

Fraser of Allander and Addleshaw Goddard noted that this suggested businesses were – where possible – working hard to retain staff as much as possible rather than opting for redundancies.

Graeme Roy, director of Fraser of Allander, said: “As we reach the end of the third week of the lockdown in our economy, the scale of the challenge facing businesses in Scotland is clearly set out in this latest business monitor. It is important to remember the shutdown of all but essential activities in our economy is entirely the right response to the crisis both from a public health and long-term economic perspective. But the immediate consequences for individual firms and their employees are stark.”