LONDON (Reuters) – British businesses are more likely to expect a rebound in activity this year than their counterparts abroad, and expectations of a pick-up in growth are stronger than at any point since 2015, a survey showed on Monday.
The global poll of 12,000 manufacturers and services providers, conducted three times a year for consultants Accenture by data company IHS Markit, showed 68% of British firms expected activity to rise, while 11% saw a fall.
The net balance of +57% is the highest since June 2015 and up from +34% in October, and also tops readings for businesses in the United States, Japan and continental Europe.
“After a tough year it is encouraging to see business confidence bouncing back,” Accenture consultant Rachel Barton said.
Britain’s economy shrank by 10% last year – its biggest fall in over 300 years as many areas of business activity ground to a halt due to the coronavirus pandemic. Government budget forecasters this month said it would take until mid-2022 for the economy to recover its pre-COVID size.
Britain suffered Europe’s highest death toll from COVID, but is now rolling out vaccines faster than other European countries and the government hopes to fully lift social-distancing restrictions by late June.
The strongest improvement in optimism in the survey – conducted from Feb. 11 to Feb. 25 – was in the hotels and restaurant sector which has been hardest hit by the crisis.
Separately, manufacturing trade body Make UK said on Monday that it was revising up its 2021 growth forecast to 3.9% from 2.7%. Industrial output in Britain slumped by 8.6% last year – the biggest drop since records began in 1949.
“After the seismic shock to the sector last year, manufacturers are now beginning to move through the gears and accelerate into recovery as demand at home increases and major markets also begin to pick up,” Make UK’s chief executive, Stephen Phipson said.
However, it warned that January data which showed a 40% slump in exports to the EU added to evidence that post-Brexit trade restrictions were causing more severe damage than the ‘teething problems’ admitted by the government so far.
Make UK said that in its latest survey, members reported a further fall in export demand that contrasted with a rebound domestically and for exporters based in other countries.
(Reporting by David Milliken, editing by Andy Bruce)