BUSINESSES in Herefordshire and Worcestershire continue to plummet as a third admit they will decrease the size of their workforce in the next three months, a group which represents firms has warned.

A new report from Herefordshire and Worcestershire Chamber of Commerce has outlined the impact of coronavirus on businesses during May and June.

Key findings found 74 per cent of businesses experienced fewer UK sales than the last quarter, with 59 per cent expecting turnover to shrink over the next three months.

Confidence and plans to increase investment have reached record low and only 20 per cent of businesses were operating at full capacity.

The quarterly economic survey (QES), which captured how businesses were performing in the two counties between Monday, May 18 and Monday, June 8, also found a third expected to reduce their workforce in the next three months.

The chamber of commerce added the outbreak of coronavirus led to a "crisis which has been characterised by an unprecedented suspension of economic activity in the UK".

"It will come as no surprise to see that this report suggests that the impact on businesses in the two counties is unparalleled by any previous data," a spokesperson added.

"The extent and pace of damage to local businesses has been far more rapid than during the global financial crisis. The data in this report shows that the impact has manifest into a much sharper shock."

They added: "The next three months will be absolutely critical for businesses.

"The report suggests that demand will need to resume, facilitated by social distancing, to ensure the UK economy can recover relatively swiftly from this economic shock. The impact of this crisis is likely to vary dramatically across different sectors."

As the Government's Coronavirus Job Retention Scheme winds down, the chamber warned the £1,000 bonus for companies who retain staff until January seems unlikely to prevent many from needing to make redundancies if demand does not pick up.

CEO Sharon Smith said: “The biggest challenge for businesses moving forward will be maintaining cash flow in a subdued economy.

"The easing of lockdown measures will need to do more than simply open businesses; consumers will need to have the confidence to go out and spend.

"Without a dramatic increase in demand and cash flow, the risk to the labour market will be significant.”