A SURVEY which suggested Britain was heading for a “double dip” recession has been called a “stark reminder” of the gravity of the Covid crisis.

The quarterly economic survey – carried out by the British Chambers of Commerce (BCC) – found a “strikingly downbeat” end to 2020.

The BCC found 43 per cent of firms saw sales fall in the final three months of 2020, rising to 79 per cent in hospitality and catering.

Ian Girling, chief executive of Dorset Chamber, said: “Clearly this is a very disappointing picture and a stark reminder of the gravity of the situation.

“From our experience clearly some sectors have, and continue to, face incredibly challenging times under the stop-start restrictions.

“However, we have seen some signs of recovery within other sectors at a pace that is greater than we might have anticipated.

“We’ll continue to do all we can in terms of the delivery of services to support businesses but also lobbying through the British Chambers of Commerce, ensuring the voice of our business community is heard at the highest levels.”

Suren Thiru, head of economics at the BCC, said: “These results indicate that economic activity was strikingly downbeat in the final quarter of 2020 as the reintroduction of tighter coronavirus restrictions weighed heavily on the key drivers of growth.

“The services sector endured a particularly difficult quarter, with consumer-facing businesses most severely exposed to the renewed restrictions.

“Though the vaccine rollout provides real optimism, a new national lockdown means that a significant double-dip recession in the first quarter of this year is looking increasingly likely.”

Dorset Chamber is accredited to the BCC, whose survey for the final quarter of 2020 covered 6,203 firms employing nearly a million people.

Manufacturers enjoyed an improvement in orders at the end of last year, with the balance of firms reporting increased domestic sales increasing to minus nine per cent, up from minus 15 per cent in the third quarter.

The balance of firms reporting increased export sales increased to minus eight per cent from minus 26 per cent in the previous three months. But the BCC said this was largely down to a temporary boost from Brexit stockpiling ahead of the year-end deal deadline.

It also found that cash flow – a key indicator of business health – in the services sector remained at levels not seen since the financial crisis, despite a slight improvement in the fourth quarter.