The Grant Thornton International Business Report is a survey of mid-market businesses. The research takes place twice a year and involves online and telephone interviews with around 10,000 businesses across 29 economies.
Tom Rathborn takes us through what we’ve learnt following the most recent survey. Including key economic outlooks, the views and expectations of the global mid-market, and where the UK sits on the global scale.
What has the first six months of 2021 taught us?
A step change in the UK reflects rising confidence across the globe.
Following the successful development and initial rollout of COVID-19 vaccination programmes, many economies are re-opening after an immensely challenging 18 months.
As a pathway through restrictions emerges, businesses appear more confident over their future performance.
Rising confidence masks ongoing concerns
In the UK economic optimism swelled in the first half of 2021 with 68% of firms reporting a positive outlook for the next 12 months, this is the highest level we’ve seen recorded in the post Brexit-referendum era. Global confidence also showed a similar trend and is now above its pre-coronavirus level. Alongside this, revenue and profit expectations both recovered well, mirroring a similar sentiment to our latest UK Business Outlook Tracker.
Business investment intentions are rising across the board too, with a clear focus on improving productivity over increased capacity. UK firms are undoubtedly feeling the benefits of a negotiated Brexit and the recent removal of many coronavirus restrictions.
This rise in outlook indicators has not been matched by an equal reduction in perceived restrictions. Economic uncertainty is still high, skills shortages remain, and there are a record number of respondents citing ‘red tape’ as a barrier to growth. So while businesses are undoubtedly more positive about the future, challenges remain both in the UK and globally.
"The sharp upwards movement in optimism and growth expectations from business leaders is phenomenal and at a level not experienced in the last decade of comparable data. This shows the resilience and adaptability of mid-market leaders who are becoming accustomed to working in difficult, ever-changing circumstances.
Given the easing of lockdown restrictions and the roll out of the vaccines, a renewed confidence that businesses can get back to where they were pre-coronavirus is accelerating optimism in the short term. As we move into 2022 and beyond, we may see some of the constraints that businesses are clearly still facing, such as the end of the Brexit grace period, growing reporting requirements, and the end to government support schemes, start to dampen optimism slightly.”