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Summary
- CBI’s measure of business sentiment for professional services rose to 23 per cent during the three months to February 2021 from a low of -21 in the previous quarter.
- However, consumer facing businesses saw a deep slump during the three-month period to February.
- Moreover, UK retail sales dropped in the year to February as stores slashed jobs rapidly.
The businesses and professional services firms have shown their biggest improvement in outlook in over five years a survey stated. However, the consumer services companies remained downbeat after being hit by the coronavirus restrictions, said the survey conducted by the Confederation of British Industries (CBI), a leading industry association in Britain. It represents interests of 190,000 small, medium, and large-sized businesses across the nation.
CBI’s gauge of sentiment for professional service firms, such as logistics and property management companies, and other businesses rose to 23 per cent during the three months to February period from a low of -21 during the previous quarter (September to November 2020). This was observed as the strongest rise since August 2015. One of the main reasons quoted by experts for this turnaround is the swift rollout of the vaccination programme. It has raised hopes of a quick bounce back in the UK economy.
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But consumer facing businesses like travel, tourism, restaurants, and hotels witnessed a deeper slump in their business during the three-month period to February, noted CBI. At the same time, the pace of fall in business was expected to east out during the next quarter, it said.
The survey was conducted during 29 January and 15 February this year before the government’s lockdown lifting plan was released.
Faltering retail sales
Meanwhile, the UK retail sales dropped in the year to February as stores slashed jobs rapidly, as per another survey released on Thursday. Only supermarkets reported any growth during the ongoing coronavirus lockdown.
CBI’s measure of retail sales for February was -45, up only slightly from January’s eight month low of -50. This is indicative of falling sales, said the trade association.
Further, the retailers’ expectations for March have plummeted sharply to -62 as non-essential shops are to remain closed as part of the gradual lockdown lifting plan.
Lockdown woes
Last week, PM Boris Johnson had said that the complete lockdown would not be lifted any time before June and is conditional upon the lowering of coronavirus cases in line with the government expectations. Market experts say that in such a scenario, most businesses would be delaying their investment plans at least to the second half of the year.
In fact, Ian Price, Director, CBI Wales, said that continuation of lockdown due to high transmission rates will cost high to most businesses. Companies want to get on the front foot as quickly as possible, he added. The earlier it is done, the lower ongoing economic damage will take place to jobs and businesses, said Price.
