An estimated 3 per cent of the workforce was signed off in late December and a fifth of businesses reported increased cancellations amid the surge in the Omicron coronavirus variant.
Latest figures from the Office for National Statistics show that absences related to Covid-19 hit a 19-month high at the end of last year, and it continued to weigh on businesses in the first week of January when it was near its peak.
According to the ONS, 21 per cent of companies suffered a rise in cancellations, with 44 per cent of businesses in the hospitality sector affected.
Restaurant reservations dropped last week when the latest wave of coronavirus cases was near its peak, according to OpenTable, the online booking website. The number of seated diners in the week to January 10 fell to 88 per cent of the level in the equivalent week in 2020.
The fall was more severe in Manchester, where reservations declined by higher than the average for the time of year, than it was in London, where there was a lower-than-average drop.
Eleven per cent of businesses reported having no cash reserves, while 7 per cent said they had low confidence or no confidence that they would survive the next three months. Another 40 per cent said they had a maximum of three months’ worth of cash reserves. The figure rose to 54 per cent for restaurants, hotels and other businesses providing food or accommodation. Businesses in the sector also reported the lowest confidence of survival in the next three months, with almost a fifth reporting that they had low or no confidence they could survive.
Martin Beck, of the EY Item Club, said that the impact of Omicron would be reflected in growth. “Some consumers appear to have cut back on social consumption while the significant number of infections will have disrupted the ability of some companies to operate. So it’s looking more likely that GDP fell in December.
“However, a boost to the health sector in December from a rise in Covid-19 testing and vaccinations, and evidence consumers shifting spending from social activities to goods means the impact on output … is likely to be much smaller than previous waves.”BUSINESS NEWS • ECONOMIC NEWS • MAKE MONEY • News