‘Back on track within a year’ of vaccine roll-out
BUSINESSES MORE CONFIDENT
THE vast majority of mid-sized businesses within the Midlands believe they will be back on level pegging within a year of a national vaccine roll-out.
A survey from business advisors BDO suggested 98 per cent say they will fully recover within a year if a vaccine is made available, while two-thirds predict recovery in just six months.
About 60 per cent of companies plan to revise their business plans once more information is known.
Bosses at companies with revenues between of £50 million and £350 million were surveyed followed news of three potential vaccine breakthroughs.
The latest BDO Rethinking the Economy survey of 500 mid-sized businesses found about half of Midlands business leaders were more optimistic about the UK’s economic recovery than three months ago.
The results seem to contradict a Lloyds Bank’s Business Barometer for November, which showed falling confidence in the economy as a whole and in individual business’s prospects for the coming months.
Despite the optimism around a potential vaccine, 92 per cent of businesses in the Midlands believe the government’s tiered system will lead to a greater economic divide.
Tim Foster, a partner at BDO LLP in the Midlands, said: “There is little doubt the news of a potential vaccine has gone a significant way to boosting the prospects of Midlands businesses.
“While the majority of business leaders in the region believe that a vaccine will help trigger recovery, the fact still remains a significant proportion of companies face stiff operational challenges.
“These include managing cashflow and international supply chains, as well as contending with the regional tiered lockdowns.
“The government’s tiered approach to lockdowns has clearly intensified the levelling up debate in the regions, with 92 per cent of midsized businesses in the Midlands believing that Covid-19 will further widen the UK’s north/south economic gap.
“The announcement of the new tiers from the government last week supports this concern, with the majority of Midlands businesses facing the toughest restrictions.
“Business owners have identified a need for infrastructure investment across the UK, with a focus on shovel-ready, high-impact projects that meet the specific needs of each region.
“Only time will tell if the Chancellor’s £4 billion Levelling up Fund will help to appease those concerns and meet the needs of the region.”
The Rethinking the Economy survey also revealed 18 per cent of businesses said another national lockdown was one of the biggest threats to their business in 2021.
However, a third of Midlands businesses are reducing the number of staff on furlough and bringing them back into the business, suggesting a level of confidence in the region’s economic recovery.