SEVEN out of 10 Hampshire firms are suffering a Covid-related business downturn involving lower demand and cancelled work contracts, a survey has found.

Six out of 10 told Hampshire Chamber of Commerce that their biggest challenge after emerging from lockdown would be getting back orders, with half expecting continuing cashflow problems.

The findings come in the chamber’s second survey since the Covid-19 crisis took hold in March.

Despite the government’s support for businesses, a fifth said they had no cash reserves or only enough to keep going for another month.

Most Hampshire firms 'fear they could go under', says chamber survey

Hampshire Chamber chief executive and executive chairman Ross McNally said: “Our members are telling us very clearly that reduced customer demand, cashflow issues and disrupted supply chains are causing them pain now and will continue to cause them huge challenges in the months ahead.

“Our message to ministers is that businesses here in Hampshire and across the UK need sustained government support to navigate the ‘new normal’.”

Nearly six out of 10 respondents had furloughed at least some of their workforce, with 15 per cent furloughing all staff.

More than four out of 10 had deferred their VAT bills, with substantially lower proportions being approved for business rates relief, small business grants, statutory sick pay refunds and coronavirus business interruption loans (CBILs).

Around 22.5 per cent said they had closed completely for the time being because of lack of work.

Some put this down to customers going out of business while others reported delays in receiving goods from UK and overseas suppliers.

More than 170 online correspondents answered 21 questions, covering the take-up of government measures such as furlough, tax deferrals, grans and loans, and their business outlook over the coming months.

Mr McNally added: “We welcome the extension to the furlough scheme and the balancing of its subsidy provision with the phased, gradual return to work.

“We call on the government to be flexible in their arrangements around other business support schemes too.

“It’s essential we have a proper partnership between business and government so that together we can ensure the lifeline of support is not withdrawn prematurely.”

In its first members’ survey after lockdown, with results published in early May, Hampshire Chamber reported 57 per cent of firms as saying they were at risk of closure or insolvency, despite state intervention. Most said the next three months would be the critical period.