The confidence and resilience of East Midlands 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 East Midlands about the country’s economic prospects averaged 72% over the year, matching the national average. One of the biggest dents in confidence was recorded in the penultimate survey, conducted in late September and early October, with 16% of businesses in the region describing themselves as ‘pessimistic’ about the future of the UK economy.
September’s panic buying and resulting fuel shortages also led to the year’s most marked setback in regional confidence, with 18% of businesses in the East Midlands saying they were ‘pessimistic’ about their ability to grow revenues.
The latest round of views 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 East Midlands being unwilling to express optimism in the UK economy.
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 East Midlands ended the year above the national average for the same metric at 82%, resurging from only 66% of businesses expressing optimism in the autumn.
Dave Hillan, partner and practice leader at Grant Thornton UK LLP in the Midlands, said: “It’s not an over exaggeration to say that 2021 has been a year like no other, and the twists and turns we’ve seen in our survey are testament to the rapidly changing landscape that businesses in the East Midlands have had to cope with.
“Unfortunately there’s still more on the horizon to be dealt with, ranging from COVID-19 restrictions, higher inflation levels and interest rates, supply chain shortages, labour concerns and rising costs.
“Many, especially in the tourism, retail and hospitality sectors, will be wondering what more can be thrown at them! However, we know that the East Midlands’ business leaders have proven themselves to be exceptionally resilient, agile and innovative since the first lockdown began and they will have a lot of valuable experience to draw on as they face the challenges of 2021.
“With the right government support and by leaning into the region’s many strengths we know that it won’t be long before businesses in the East Midlands are feeling optimistic again.”
