Middle market businesses believe their revenues will increase in 2021 and that a full UK economic recovery will emerge within two years, despite the challenges presented by Brexit and the global pandemic which impacted trade throughout 2020 and early 2021.
The Real Economy survey by leading audit, tax and consulting firm RSM, in partnership with The Harris Poll, questioned over 400 seemingly optimistic middle market business leaders to uncover the challenges and opportunities following the end of the Brexit transition period.
Nearly two-thirds (63 per cent) of business leaders surveyed were confident that their turnover would increase in the next six months, with 56 per cent predicting a full economic recovery within two years.
This optimism comes despite 45 per cent suffering a fall in turnover between December 2020 and February 2021; and over a third (35 per cent) experiencing a negative impact on their supply chains since the start of January.
Half of all respondents (50 per cent) expect to see an increase in prices for goods and services as a consequence of Brexit, and over a third (35 per cent) expect to increase their prices as a result.
Simon Hart, lead International partner at RSM UK, comments: ‘It’s encouraging to see the middle market is confident about the future. The acceleration of the vaccine rollout, coupled with the Trade and Cooperation Agreement with the EU and continued business relief and stimulus support from the Government during the ongoing pandemic is allowing businesses to take a more optimistic view of 2021.
‘The UK looks on track to achieve a 4 per cent growth in GDP this year despite ongoing lockdown restrictions; and economic landscape suggests an even stronger growth in 2022, possibly around 7 per cent. Driving this recovery will be the great British household as pent up consumer savings are released; combined with businesses taking advantage of low interest rates and making long-term investments in capital expenditure to improve productivity; invest in new products; and expand into new international markets.
‘However, middle market businesses need to keep monitoring our largest trading partner, Europe, as any continued issues in the vaccine rollout on the continent could have a negative knock-on impact to the UK’s overall economic landscape.’
RSM’s survey, entitled ‘Finding opportunity from change’ marked the launch of The Real Economy – the first in a series of topical quarterly surveys focusing on the middle market as a powerhouse of the UK economy. It is also the first authoritative source of economic data for this crucial area of UK market, sharing insight and perspective for the wider economy.