23 August 2021
The Institute of Chartered Accountants in England and Wales (ICAEW) have launched their Q3 Business Confidence monitor results. These show that business confidence has hit a record high for the second quarter in a row, reflecting expectations of strong sales growth as the economy reopens. The findings come after the Office for National Statistics figures published last week showed that Britain’s economy grew 4.8% between April and June.
Michael Izza, CEO of ICAEW commented on the report – ‘Business confidence has now hit record levels for two quarters in a row – companies are clearly benefiting from rising customer demand as the economy reopens and life begins to return to normal. The high level of optimism is unsurprising but it remains vulnerable to a possible resurgence of COVID-19 as we head into the autumn.
While confidence is high across all sectors, with companies reporting record expectations for domestic sales growth, they also told us they face challenges from skills shortages, wage increases and rising costs.
This is a crucial stage for the economy. Despite having to cope with the winding down of government financial support and possible interest rate rises, businesses are definitely bouncing back, but finances are fragile, and any additional costs could threaten the recovery.’
BCM Q3 key findings
- Confidence is again at a record level since the survey started in 2004, boosted by strong sales expectations, especially for domestic markets.
- As the economy rebounds, businesses face slightly different challenges with skills availability, staff turnover, regulatory restrictions and (especially for Manufacturers and those that export) transport problems rising in prominence.
- Companies also expect costs and prices to rise as the economy expands but they are not anticipating either those or selling prices to rise more rapidly than in the pre-pandemic period.
- Businesses plan to raise investment in capital equipment and Research & Development, reflecting the strength of demand, less widespread problems of spare capacity, and higher expected profits. Retailers and Wholesalers are in the forefront, as they shift increasingly online.
- The optimism is shared across sectors, after a year in which some saw a rise in sales but others experienced significant declines.
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