British business leaders are planning to expand operations and increase investment in 2022, three surveys released on Monday showed, despite some concerns expressed by bosses labor shortage and the effects of Omicron coronavirus variants.
British companies are entering the new year with more optimism than ever, and expect strong growth from strong consumer demand, the survey showed.
Deloitte chief economist Ian Stewart said: “Just as the stock market rebounded in the new year, CFOs seem to have Set their sights on Omicron and plan to focus their business on growth in 2022.”
Deloitte’s survey shows that finance officials are more enthusiastic about investing in 2022 than in any previous year since the question began to be asked in 2009.
The main driver of planned increased investment this year is the expected strong UK and global demand for its companies’ goods and services, rather than policy tools such as excess deductions for capital expenditure in the corporate tax system, valid until 2023, or the government’s upgrade agenda.
These senior executives also expect their companies to have less ties to the EU with new trade barriers from the EU. Brexit Keep biting.
But according to Stewart, these obstacles are more worrisome than labor shortages. “It’s a measure of the dramatic pick-up in activity and the scale of today’s challenges as a result of the pandemic, with CFOs seeing labor shortages as the biggest risk to their businesses,” he said.
In the survey, finance officials listed ongoing labor shortages, pandemics, climate change and higher inflation as the biggest risks to their businesses, but they were far less concerned about the coronavirus than they were in early 2021.
Labour shortage concerns were also evident in Make UK’s survey of manufacturing, which accounts for about 10% of the UK economy.
Make UK expects the part of its economy to grow by 6.9% in 2021 as it recovers from the pandemic, and forecasts another relatively strong year for 2022, with a further 3.3% growth.
Stephen Phipson, chief executive of Make UK, said British manufacturers had proved their worth by emerging from the pandemic. “While cloud is on the horizon in the form of rapidly rising costs and access to critical skills, the outlook is more positive for those who remain adaptable, agile and innovative,” he said.
Accounting and business consulting firm BDO has a slightly pessimistic assessment of the business environment. Amid the wave of infections in Omicron, its monthly measures of business optimism and output fell in December, although both remained above average.
Kaley Crossthwaite, a partner at BDO, said the decline in optimism in December stemmed from “ongoing uncertainty” about Omicron, supply chain disruption and inflationary pressures. “While the health of the job market remains a silver lining for workers and the government, it also shows that businesses are having trouble recruiting and retaining staff,” she added.