the global investor
Glimmer of hope as UK economy starts to emerge from the ashes:
Majority of businesses have a positive outlook for next 12 months
T
he number of businesses with a positive outlook for the next 12 months exceeds the number with a negative outlook for the first time, in the clearest sign yet that parts of the economy are slowly springing to life, according to the latest wave of the Opinium-Cebr Business Distress Tracker. However, despite the marginal improvements the UK is still not out of the woods.The latest Tracker suggests that more than half a million (544,000) businesses are at a high risk of entering insolvency as a result of coronavirus-related disruption – up from 510,000 two weeks ago.
Business Distress Tracker topline results • The picture varies considerably across sectors. Half of businesses
90
(50%) in manufacturing & construction say that current trading conditions are good, compared to just over a quarter (28%) of service sector firms. • The survey results pour more cold water on the notion of a V-shaped recovery, as the average anticipated recovery time rises by three weeks to 31 weeks. The pattern observed in recent weeks suggests that the longer the lockdown persists, the longer the recovery will take. • The most commonly cited drivers of the delay in raising production are reduced demand from customers, a weakening of business-customer relationships, and reduced access to inputs necessary for production. Meanwhile, more than two-fifths (43%) of
businesses are concerned about a deterioration in the skills and productivity of workers that have been placed on furlough. James Endersby, CEO at Opinium said “Although the situation remains extremely challenging for many businesses, the easing of lockdown in recent weeks have led some to anticipate the end of prohibitive restrictions on their operations. We are far from being out of the woods yet, but the direction of travel has injected greater positivity into the business community. The number of us going back to work is accelerating and many are seeing the prospects for their business improve. “The challenge facing us is the disjointed return to normal. Large numbers are facing disruption to demand from their customers and
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