A survey conducted by industry researchers has identified that firms are most optimistic since 2005, as hiring intentions reach record high numbers despite the surge in COVID cases.
UK business confidence has jumped in recent weeks despite the rise in COVID infections, as firms anticipate the lifting of lockdown restrictions later this month.
A survey conducted by industry researchers found that firms were their most optimistic since 2005 in June 2021. According to the data, manufacturing optimism took a sharp rise, due to the improved global economic outlook which has been driven by the COVID-19 vaccine rollout this year.
Mark Richardson, Partner at BB&J Commercial said “businesses are evidently looking forward to the lifting of restrictions on the 19 July. After a difficult year of unpredictable change, the ending of restrictions is timely, although rising COVID-19 cases still give an element of uncertainty.”
Companies also reported that inflation pressures had hit a four-year high, with supply chain disruptions due to Brexit, the pandemic, and the Suez Canal blockage earlier this year pushing up costs.
Further research identified that 1,400 UK private sector firms expect an increase in business activity over the coming year. Only 9% predicted a fall, giving the highest business expectations reading in 16 years.
Hiring intentions among businesses also rose to a record high, as firms anticipate a healthy recovery. However, some firms fear that recruitment plans could be hindered by a lack of available labour, particularly in sectors that rely on a large pool of EU workers.
In addition, many firms are expecting to raise wages, with a balance of +70% of firms anticipating rising staff costs. Others also plan to pass this on to customers, with a record net balance of +48% of businesses plan to raise their selling prices. This could push consumer price inflation higher over the coming months.
Mark commented, “despite the continued uncertainty, it is hugely encouraging to see that confidence remains high among other British businesses. At BB&J Commercial, we have translated this confidence into action, as we have been hiring more to grow the potential of our business and have invested in the improvement of our branding. We have noticed that many businesses have done the same, showing optimism for the future.”
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