Business confidence has hit its lowest level on record as it emerged a year’s worth of profit warnings had already been issued in 2020.
Companies have contracted operations and furloughed staff en masse due to the pandemic, which looks likely to cause a greater economic catastrophe than the 2008 financial crisis.
As a result, 83pc of chief financial officers at Britain’s largest publicly traded companies are less optimistic than they were three months ago, according to the Deloitte CFO Survey.
The restrictions on trade also caused FTSE 350 companies to issue 301 profit warnings before the end of March, marginally below the 313 reported in all of 2019, according to a separate study from EY.
The dip in confidence is well below the trough reported at the height of the financial crisis, according to the survey of 104 finance chiefs, which included representatives from 23 of the UK’s 100 largest listed businesses and 43 from the FTSE 250.
The Deloitte study found that 59pc of companies had already furloughed staff or intended to do so. Just over three quarters of finance chiefs expected demand for products and services to revive later this year, with the months of July and August viewed as crucial.
The finance bosses also said they expected revenues to be more than a fifth lower, on average, than their pre-Covid-19 plans this year.
The expected 22pc decline is more than four times greater than the widely tipped 5.4pc contraction in UK GDP.
However, Deloitte said there was “no expectation” of a quick snapback in activity in the second half of this year.
The majority questioned said they did not expect demand to return to pre-Covid levels until 2021.
They also tipped flexible and remote working to be the big winner from the pandemic, with 98pc expecting it to become more prevalent as a result of the crisis.
The Deloitte report pointed to an “unprecedented” focus on cost control through the sale of assets and debt reduction.
It also stated that businesses expected to see a “greater role” for the state going forward, and that there would be higher levels of both corporate and household taxation.
Richard Houston, senior partner at Deloitte, said finance leaders were facing their toughest challenge in decades.
“Leaders are already thinking beyond the downturn and how to adapt and prosper in a changed world,” he said.
“Almost all finance leaders believe that flexible working will gain ground in the wake of this crisis. We have an opportunity to rethink the future of work in a way that boosts opportunity.”
Lockdown has also bloated the number of companies warning investors of missed targets.
Profit warnings are up 238pc so far this year and are 5pc greater than the 287 issued in all of 2018, according to EY.
More than a fifth of public quoted companies issued a profit warning in the first quarter, which compares with the 17pc that issued notices in 2008.
While 77pc of the warnings blamed the pandemic, EY said that significant parts of Britain’s public companies were “struggling” before the outbreak. Warnings were already up 43pc year-on-year in January.