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Orkney businesses fear ‘massive crash’ in local economy

A survey of business organisations has revealed that over half of them may not survive if the impacts of coronavirus on the economy, if the worst case scenario comes true.

The sobering projections of a survey conducted by Orkney businesses have been revealed today, predicting that some 3,000 local jobs may be lost, and the amount of money flowing through the local economy could be almost halved — if the worst impacts of the coronavirus pandemic come to pass.

Over half of the businesses surveyed say they would be unlikely to survive this worst case scenario.

A group of Orkney business organisations came together to assess the impact of the pandemic. They carried out an online survey of each organisation’s members so that, when the results were pooled, a picture of the current situation and expectations for the future would emerge. They have described the results as “frightening.”

It is feared that the end of the furlough scheme in late summer will lead to multiple redundancies, as demand in many parts of the economy falls short of what current staffing is set up to meet.

The survey predicts, at worst, that around 1,700 full-time jobs and 1,500 part-time jobs could be lost. While the group cautions that these figures are only projections — not reality — they have said even if reality ends up being half as bad as this, the situation will still be “far worse than anything in living memory.”

Other findings from the survey indicate that the money flowing through Orkney’s economy could decrease by as much as 45 per cent over the next 12 months. The group says If that is the case, more than half of businesses currently operating estimate that they would be unlikely to survive, making recovery in 2021 even harder.

Bodies involved with the group include the National Farmers Union, Orkney Fisheries Association, Stromness Community Business Forum, Kirkwall BID, Destination Orkney, and representatives from the construction and renewable energy sectors. Virtual meetings were held from late April into May, as the full effect of the virus became apparent. OIC’s chief executive, John Mundell, and director of development and Infrastructure, Gavin Barr, also attended, and were fully engaged with the process.

Fiona Smith, co-chairwoman of the group, said: “Such job losses have obvious consequences for family finances, mental health, and the social fabric of Orkney. It underlines that these results are not just about business, they are about the whole community.”

Neil Kermode, the second co-chairman, said, “We have shared our findings with Orkney Islands Council, and I know they are treating them seriously. We hope that joint working between the private and public sectors can mitigate the worst effects of the coming crash. Nevertheless, it seems clear that there will be a traumatic ‘three winters’ scenario, from the end of the furlough scheme, through the winter months, at least until the start of summer 2021. Orkney needs to prepare for very tough times ahead.”

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