According to the Institute of Directors’ (IoD) latest Confidence Tracker, the news that three COVID-19 vaccines have passed phase three trials, with one now approved for UK use, has lifted business confidence, despite lingering wariness about 2021 among company directors.
The tracker measured that net optimism among directors in a 12-month outlook for their business increased from +8 to +24, a level of optimism not seen since prior to the UK’s first lockdown. 64 per cent of directors polled say that a mass vaccination programme would improve their 2021 prospects.
However, despite an increase in confidence about the UK economy’s long-term prospects, sentiment still remained negative, rising from -57 to -34. 56 per cent of directors polled reported feeling pessimistic about the future of the economy.
Directors’ confidence in their own company’s stood at +24, with the tracker showing that directors at larger firms tended to be more optimistic about their prospects than their counterparts at smaller companies.
Regarding the biggest risks to business activity, 49 per cent mentioned Brexit and Britain’s uncertain future trading status with the EU, putting it second in the ranking of risk factors, predictably behind COVID-19. Fears have been mounting in recent days that Britain’s transition period would end without a deal in place.
According to the IoD, the poll of 728 directors reinforces the case for supporting restricted areas of the economy during winter, urging larger grants for companies in supply chains which have seen their demand impacted by COVID-19 restrictions, as well as greater discretionary support for company’s excluded from previous schemes.
The IoD furthermore recommended the government boost hiring support and investment in order to aid a swifter economic recovery. It also recommended the provision of Brexit vouchers to enable SMEs to get the specialist and legal help they need to adjust.
Author: Steven English