Businesses look ahead to the road to recovery

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Date: 23 February 2021

A road heading towards the sunrise with 2021 written on it

Business groups have welcomed the government's roadmap out of lockdown as a new Barclaycard survey suggest small firms are optimistic about their prospects once restrictions are lifted.

Boris Johnson's plan for gradually reopening the economy has been met with approval by business groups eager to see long-term certainty and an end to stop-start lockdowns.

Tony Danker, CBI director-general, said: "The roadmap is a good starting point to the hard yards ahead and caution is rightly the watchword. Business backs the step-by-step approach to re-opening and puts an end to damaging stop-start restrictions."

He added: "We now need to turn this roadmap into genuine economic momentum. The Budget is the second half of this announcement - extending business support in parallel to restrictions will give firms a bridge to the other side."

Adam Marshall, director general of the British Chambers of Commerce (BCC), said: "It is helpful that many businesses across England can now see a path to restart and recovery. Absolute clarity and honesty will be needed every step of the way over the weeks ahead, so that businesses have a fighting chance to rebuild. The stop-start dynamic of the past year, which has so damaged businesses and communities, must come to an end."

Echoing the CBI's call for more business support, Marshall said: "Even with the prime minister's new roadmap, the future of thousands of firms and millions of jobs still hangs by a thread … All the key support schemes for business should be extended - through the summer and wherever possible throughout 2021 - to ensure that as many viable firms as possible can make it to the finish line and recover."

The latest quarterly Barclaycard Payments SME Barometer has found that small firms expect growth of 8.1% in 2021 and nearly four in ten (39%) say they are optimistic about their prospects. In fact, one in four small businesses say their output has already surpassed, or returned to, pre-pandemic levels seen at the start of 2020.

However, there is a long way to go, with many firms braced for further short-term losses in the first three months of this year and just 32% of small firms say they are prepared for the end of national lockdown measures.

Even so, 42% of SMEs say they think the current lockdown will be the final national lockdown and, of these, 70% are optimistic or cautiously optimistic for what's next. SMEs expect the greatest growth opportunities in recovery will be increased consumer footfall (21%) and supply chains returning to normal (17%).

Looking ahead, the findings show that:

  • 29% of SMEs will invest in new equipment and technology in 2021;
  • 30% expect their number of full-time employees to increase over the course of 2021;
  • 41% will continue offering flexible working and don't mind where their staff are based.

Rob Cameron, ceo of Barclaycard Payments, said: "SMEs have proven their agility, adapting quickly to get online, catering to a nation stuck at home and changing how their teams get the job done. While the world may be returning to some form of normal this year, small businesses have realised the benefits of flexible working and digital skills, with many already looking at what improvements they can take forward into 2021."

Written by Rachel Miller.

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