UK market recovery insights from eScalate Programme Advisor, Andrea Collins
With the UK vaccination programme ahead of target, even the new Delta variant did not impact the Government’s decision to ease all restrictions in July. Whilst amazing news for businesses and people alike (consumer-facing service sectors such as hospitality and accommodation, which bore the brunt of the lockdowns, have reopened, albeit with capacity limits) the country has not yet returned to ‘normal’ and maybe never will. Some businesses and sectors are forever changed.
The furlough scheme continues to reduce the immediate impact for the labour market, unemployment remains under 5% and job vacancies are reportedly on the rise, especially in sectors that are reopening after months of lockdown.
Some of the big 4 who have conducted large scale business leader surveys report that there is more optimism in the business community; many companies have shifted from planned cost-cutting strategies to more expansion focused programmes. Leading economists are also feeling more optimistic, upgrading their forecasts for GDP growth to 7.5% and predicting that the UK will see one of the strongest upturns when compared to other global markets. Meanwhile, the Bank of England no longer expects unemployment to hit 7.8% but rather settle at around 5.5%.
All this said, risks do remain. We can’t deny that the combination of new COVID variants, some maybe vaccine resistant, hitting during the Winter flu season, could severely impact economic recovery. Furthermore, as the furlough scheme comes to an end, although unemployment forecasts have been lowered, unemployment will be at its highest level since 2014. Bizarrely, one of the impacts of EU Exit and an about-turn on immigration, is a critical shortage of labour in certain sectors like agriculture (and linked industries) and transport, with an estimated shortage of 160K drivers.
So, what can we as business leaders do? Well, if a COVID-like pandemic was not previously on your risk register, it should certainly be now. If you don’t have a formalised business resilience plan, just get in touch with me directly and I can forward you a tried and tested format. Insurance companies are starting to mandate that companies provide these plans in order to obtain business insurance, so it is valuable piece of work to undertake.
Furthermore, take the learnings from these last 16 months or so, where we’ve weathered both the COVID and EU Exit storms, to build more resilience within your operation. Evaluate your supply chains; get on top of your finances (you should be able to know at any single point during your financial year, where you are with P&L and cashflow); build agility into your decision making; be constantly on the lookout for opportunities to diversify and introduce new, more resilient revenue streams; and never be afraid to ask for advice and support! Outside of the eScalate programme, the wider OxLEP Growth Hub has a host of other programmes offering 1:1 and workshop support.
That’s it from me for now. As always you are very welcome to book a 1:1 with me directly; I’d be delighted to help devise a plan on how you can access the right support and get the most value from the eScalate programme. Just book a date/time that works best for you via my Calendly.
In September’s newsletter, we’ll take a look at how investors are responding to the economic upturn and how that is likely to impact companies looking to fund their growth through VC or angel investment.