Business confidence at record high in quarterly index
Business confidence has hit its highest level since a survey of Glos businesses began in 2004.
Sentiment tracked by ESB Accountancy found optimism at 38.5 on the quarterly index, its highest level since the survey was launched 17 years ago and second highest since 2014. The record reading for Q2 2021 signals that a large majority of companies surveyed expect economic conditions to improve over the next 12 months, with record domestic sales forecast.
The continued success of the vaccine rollout programme in the UK and sharp decline in Covid infection rates is likely to explain why businesses are so confident for the year ahead.
The lifting of Covid restrictions, together with accumulated household savings from a year of lockdowns, make a sharp rise in consumer spending likely for the rest of 2021.
Business confidence had returned to positive territory in Q1 and the record levels this quarter reflect rising optimism about large parts of the economy reopening.
The findings from the BCM come after figures from the Office for National Statistics showed the UK economy had contracted by 1.5% in the first three months of 2021, but gathered speed in March as lockdown restrictions were eased.
Record domestic sales growth expected, but uncertainty remains
While business confidence is high, it may yet prove to be fragile given both global economic and health risks, which the UK is not necessarily insulated from, and the possibility that the level of consumer recovery may disappoint.
However, companies expected to see record growth in domestic sales over the next 12 months, and exports are also likely to increase, though not at the same rate. 
Businesses also expected profits to increase in line with domestic sales and investment to rise over the coming year in line with profits. 
Many companies predicted employment levels would rise at their fastest rate in six years, reversing a small fall over the past year. The government’s furlough scheme may have prevented greater job losses during this period, the report said.
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