The vaccination rollout has improved business confidence, multiple pieces of research have revealed.
Santander’s Spring 2021 Trade Barometer has found that business confidence has increased, with 65 per cent of companies confident of growth over the next three years, up from 59 per cent in Autumn 2020.
Companies consider the rollout of Covid-19 vaccines, the impact of the pandemic on customer demand and the UK’s economic prospects as key growth drivers.
However, business performance has continued to deteriorate, with only 30 per cent of companies saying performance has improved over the past 12 months, down from 32 per cent in Autumn 2020.
The research showed that the coronavirus remains the main potential source of negative impact over the next 12 months, although companies are less concerned overall.
The barometer has found that businesses believe that growth in the domestic market, growth in existing international markets and growth as a result of diversification will be the main drivers of recovery.
Similarly, a survey from Nucleus Commercial Finance has revealed that a third of small- and medium-sized enterprise (SME) leaders are optimistic about the year ahead.
Business optimism differs greatly by company size, with nearly half (47 per cent) of larger SMEs (those with 50 to 249 employees) feeling positive, compared to 39 per cent for those with 10 to 49 employees, and three in 10 (29 per cent) for those companies with one to nine employees.
Despite this optimism, SME leaders are most concerned about the economic impact of Covid-19 (23 per cent), followed by reduced consumer spending (12 per cent), Brexit (eight per cent) and the speed of getting the population vaccinated (eight per cent).
Furthermore, the Lloyds Bank UK Recovery Tracker has found that six of the 14 sectors it monitored saw increased output in February, up from three in January.
Read more: Vaccine rollout boosts SME confidence
“It’s extremely encouraging to see that it’s not all doom and gloom for UK SMEs,” said Chirag Shah, chief executive of Nucleus Commercial Finance.
“While the last year has clearly been one of the toughest years in history for businesses due to the global pandemic, out of every challenge comes opportunity.
“SMEs have been resilient throughout the pandemic and I firmly believe we will see SMEs rise from the ashes to make a meaningful difference to the lives of their customers, as well as their essential contribution to the UK economy.
“As an industry, we are ready to support those businesses which are looking for finance to help them not only survive, but thrive in the current environment.”