Rethinking the economy: Rethink survey findings
- Over the next six months more than half (51%) of mid-sized firms are planning to grow their workforce to larger than pre-pandemic levels
- However, 56% cite recruitment and retention issues as their biggest barriers to growth, and 58% struggle to fill open roles
- Rising inflation expectations are cause for concern across the board
Mid-sized businesses remain optimistic about their post-pandemic recovery but staff shortages and concerns around rising inflation are threatening to derail future growth, according to a new report released today.
- 86% of businesses plan to recruit more staff in the next six months
- Three quarters of businesses say 2021 is the year to invest; nearly half planning new investments as a direct result of super deduction
- 75% predict a return to pre-pandemic revenues within a year
The UK economy is set for a significant boost as UK mid-sized businesses emerge from a winter of lockdowns and restrictions with plans to invest and recruit, according to new figures published today.
According to the data from accountancy and advisory firm, BDO, medium-sized businesses are set to spearhead the UK’s economic recovery with three quarters (75%) of mid-tier businesses stating that 2021 is the time to invest, and over a quarter (26%) already planning to invest in new locations or M&A.
Medium-sized businesses struggle as lockdown restrictions continue
- Almost half (49%) of mid-sized businesses say they will struggle to continue trading if the strictest restrictions continue for a further two months
- Medium-sized companies across the UK have taken on an average of £8m in extra debt as a result of Covid-19
- Nearly half (45%) are unsure if they will be able to pay additional debt back under current funding arrangements
Our latest ‘Rethinking the Economy’ data is showing lockdown is taking its toll on medium-sized businesses, with nearly half (49%) warning that they could cease trading in less than two months if restrictions do not ease. If the current lockdown lasts a further three months into April, 82% say they would be at serious risk.
While the health implications of lifting lockdown restrictions too early will understandably be the primary concern of Government, these figures show that a continued shutdown could have major implications for the wider economy.
Medium-sized businesses across the UK generate £1.4 trillion in revenues each year and provide one in four jobs, making them a critical part of any post-pandemic recovery.
February’s data is also showing that mid-tier companies have borrowed an average of £8 million per business as a direct result of the pandemic, with almost half (45%) unsure that they will be able to pay back their loans under the current funding arrangements. Almost a third (31%) believe the Government should extend repayment terms on Covid-19 loans.
UK's Mid-tier businesses predict sharp recovery once vaccine rolls out
- 94% of UK mid-sized businesses say they will fully recover from Covid-19 within a year if a vaccine is made available; more than two thirds (68%) predict a recovery in just six months
- Nearly half (41%) are revising business plans after recent positive vaccine news, although significant majority (85%) fear a greater economic regional divide due to new tiering system
The UK’s mid-sized businesses – responsible for one in three UK jobs – are predicting a sharp recovery in their fortunes once COVID-19 vaccines roll out, according to new data published today.
Buoyed by news of vaccine trial successes, more than two thirds (68%) of the UK’s mid-tier businesses predict they will fully recover within just six months once a vaccine for COVID-19 is made available.
The fifth edition of the monthly Rethinking the Economy poll of 500 leaders of mid-sized businesses, found that 94% of mid-sized businesses believe that a vaccine will enable their business to recover within a year. 41% say they have already made significant changes to their 2021 business plans following the news of likely vaccines.
Medium-sized businesses believe the regional economic gap has widened
While cash flow remains the single biggest concern for medium-sized businesses, almost two thirds of the business leaders believe that COVID-19 will widen the economic gap between North and South while a third believe it will slow down the Government’s regional “levelling up” plans.
These are the key findings of the November edition of our “Rethinking the Economy” survey of 500 leaders of medium-sized businesses in the UK.
We are tracking how medium-sized businesses, the UK’s economic engine, are faring in the new reality. We are championing the key role these businesses must have in any economic recovery and raising awareness of the issues and challenges they face in creating sustainable and resilient growth.
Previous survey results
62% of medium-sized businesses surveyed believe that a second wave of COVID-19 presents a bigger threat than a ‘no-deal’ Brexit. This is the key finding of this month’s Rethinking the economy data. 98% of respondents have already made job cuts due to the pandemic. Despite the challenging economic climate, 86% still believe that the government can make progress towards the goal of levelling-up regions over the next three years.
60% of medium-sized businesses are planning redundancies because the Government's Coronavirus Job Retention Scheme is ending in October. These businesses have also expressed concern over funding arrangements, with 32% reporting that as it stands, they cannot continue trading for longer than six months. Despite a challenging period, may businesses have been adapting; 33% have invested in new technology and 29% have launched new products or services.
Read more about retaining a resilient workforce
Business leaders have taken an average of £21 million in loans each as a direct result of COVID-19. While most companies plan to repay the debt, 10% do not expect to be able to pay the full amount back. However, the findings also point to some early signs of recovery and resilience within the mid-market.
Download the key themes