The confidence and resilience of West Midland’s businesses that held up well during the roller-coaster journey through 2021 is facing another dip over the impact of Covid this winter.
Grant Thornton UK LLP’s Business Outlook Tracker* surveyed c.600 mid-market businesses every other month during a year that began in full lockdown and was followed by a gradual exit from restrictions up to ‘Freedom Day’ in July.
Optimism in the West Midlands about the UK’s economic prospects averaged 75% over the year, just above the national average of 72%. The biggest dent in confidence was recorded in July and August, when a third wave of COVID-19 infections was gripping the country, with 12% of local businesses describing themselves as ‘pessimistic’ about the country’s economic future.
Across the UK, confidence around revenue growth within businesses peaked in the summer, (with 83% expressing optimism) before plunging 17 percentage points to 66% by December. The West Midlands is currently at its lowest ebb on this metric, with only 60% of mid-market businesses optimistic about the chances of improving the bottom line.
Views captured in the latest survey were gathered during the initial outbreak of the Omicron variant, just prior to the announcement of the Government’s Plan B measures. Pessimism in the nation’s business landscape was evident, with more than a quarter (26%) of firms in the West Midlands being unwilling to express optimism in the UK economy.
Dave Hillan, Partner and Practice Leader at Grant Thornton UK LLP in the Midlands, said: “I’m sure that many businesses in the West Midlands had hoped that the upheavals of the past 21 months were starting to smooth out, but instead they are facing a renewed round of uncertainty. Not only is Plan C now looming on the horizon, but soaring levels of inflation, interest rate rises, supply chain shortages, labour concerns and increasing costs are all combining to complicate the business landscape.
“Despite these challenges, we can take confidence in the fact that the region’s business leaders have proven themselves to be exceptionally resilient and now have a wealth of experience that will help them overcome future hurdles. The West Midlands also has a lot of inherent strengths and opportunities that will help boost the region’s confidence, including the fact that we’ve got a fantastic chance to show the world everything that’s great about this area when the Commonwealth Games comes to Birmingham!
“If the government also follows through on its promises of investment and supercharging the vaccination program, then there’s a lot of reasons for West Midland’s businesses to start feeling optimistic again as we start 2022.”
