There is light at the end of the tunnel – The German-British Chamber’s Spring Survey shows that the German-British business community is much more optimistic about the future than it was 6 months ago
There is light at the end of the Covid-19 tunnel, as 44% of companies currently view their own operations in the UK as performing positively or very positively (38% as stable).
52% also expect the UK economy to perform better or significantly better over the coming 12 months (22% expect a stable development in the UK). However, companies think that a full recovery from the Coronavirus pandemic for the UK economy is still some way off. The majority expects a full recovery to take at least another 18 months.
In terms of investment plans, companies are also much more positive, with more than a third (35%) planning to increase, and only 10% planning to decrease, their investments. In the autumn of 2020, only 5% planned to increase investment and 20% planned to decrease it. In line with the planned increase in investment, 44% of companies expect to hire new employees – again a substantial improvement on last autumn when only 11% planned to do so.
Nevertheless, Brexit and Covid are still having a significant effect on a majority of companies as trade barriers/customs formalities and travel restrictions continue to be the top two challenges for businesses.
In terms of the future structure of supply chains, the Brexit-related trade barriers also appear to have a very significant (and much larger than Covid-19) effect on future sourcing decisions. However, many plans to relocate some operations/business activities have been shelved. Now only 20% (versus 70% last autumn) have plans to do so.
Dr Ulrich Hoppe, Director General of the German-British Chamber of Industry & Commerce, commented, "The survey results suggest that, despite the current challenges of Covid-19 and Brexit, the sentiment in the German-British business community is much more upbeat than six or twelve months ago. However, the effect of Brexit on the future structure of supply chains should not be underestimated, as trade barriers/customs formalities and extra costs remain a critical issue for many businesses.”
117 online interviews were conducted with members of the German-British business community with UK operations. The study was part of the World Business Outlook survey of the Association of German Chambers of Industry & Commerce. Fieldwork was conducted between 25 March to 9 April 2021. The full results can be found HERE