Sat. Jan 22nd, 2022

UK corporate leaders plan to expand operations and increase investment in 2022, according to three polls released on Monday, although bosses have expressed some concern about work cards and the impact of the Omicron coronavirus variant.

The surveys suggest that UK companies are entering the new year with greater optimism than usual and expect strong consumer demand to provide a strong year of growth.

Ian Stewart, chief economist at Deloitte, who interviewed chief financial officers of 85 major UK companies, said: “Like stock markets, which have entered the new year, financial directors seem to be looking beyond Omicron and planning to grow their businesses in 2022. focus. . ”

The Deloitte survey showed that financial officials were more eager to invest in 2022 than in any other year since he started asking the question in 2009.

The main driver of planned higher investment this year was the expectation of strong UK and global demand for their company’s goods and services rather than policy instruments, such as the super-deduction of capital expenditure in the corporate tax system, which extends to 2023, or the government’s equalize agenda.

These senior executives also expected that their company’s ties with the EU would diminish as the new trade barriers from Brexit keep biting.

But these obstacles were a lesser concern than labor shortages, according to Stewart. “It is a measure of both the remarkable decline in activity of the pandemic and the extent of the challenge today that chief financial officers consider labor shortages to be the greatest risk to business,” he said.

In the survey, financial officials cited persistent labor shortages, the pandemic, climate change and higher inflation as the biggest risks facing their businesses, but were much less concerned about coronavirus than at the beginning of 2021.

Concerns about labor shortages were also evident in Make UK’s survey of the manufacturing sector, which represents around 10 per cent of the UK economy.

Make UK expects its share of the economy to have grown by 6.9 per cent in 2021 as it recovers from the pandemic and predicts another relatively strong year in 2022, with a further expansion of 3.3 per cent.

Stephen Phipson, CEO of Make UK, said manufacturers in the UK had shown their value by coming out of the pandemic in a strong position. “While clouds remain on the horizon in the form of rapidly rising costs and access to key skills, the outlook is more positive for those who remain adaptable, agile and innovative,” he said.

A slightly more derogatory assessment of the business environment came from BDO, the accounting and business consulting firm. Its monthly indicators of business optimism and output fell amid the wave of Omicron infections in December, although both indicators were still above their average levels.

Kaley Crossthwaite, a partner at BDO, said the decline in optimism in December stemmed from “ongoing uncertainty” over Omicron, supply chain disruption and inflationary pressures. She added: “While the health of the labor market remains a glimmer of hope for employees and the government, it also shows the problems businesses are experiencing in recruiting and retaining staff.”

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