Business as usual: Mid-tier firms predict rapid recovery after vaccine rollout
The vast majority (94%) of mid-sized businesses in the UK believe they will fully recover from Covid-19 within a year if a vaccine is made available.
More than two-thirds of mid-tier businesses – those with revenue of between £10m and £300m – think they will be fully recovered in just six months, according to new research from BDO.
More than two in five (41%) of mid-tier business leaders have already made significant changes to their 2021 business plans following the news of a likely vaccine.
Moderna and Pfizer/Biontech said their vaccines were more than 90 per cent effective.
Astrazeneca/Oxford University announced that their jab was around 70 per cent effective, although some have questioned the data. Astrazeneca is mulling running another trial to try to assuage concerns.
The UK expects to receive around 40m doses of the Pfizer vaccine by the end of 2021, with the majority of doses anticipated in the first half of the year. It has also ordered 5m doses of the Moderna jab and 100m doses of the Astra vaccine.
The vaccine news has given a boost to retail and hospitality businesses in particular. Some 71 per cent of retailers and 69 per cent of hospitality companies have predicted recovery within six months following the introduction of a vaccine.
The service sector more broadly has been particularly boosted by the news, with 67 per cent of financial services companies optimistic that a vaccine will help their businesses recover within six months.
Over half of businesses (53%) also reported feeling more optimistic about the UK’s economic recovery now compared with three months ago.
Tough winter ahead
BDO managing partner Paul Eagland said the coming months posed the biggest worry for business: “The most immediate concern for medium-sized businesses will be surviving a difficult winter on low cash reserves, coupled with uncertainty of Brexit and national and regional restrictions.
“While the Chancellor’s spending review shows a renewed commitment to the levelling up programme, the return to a regional tier system could pose tough challenges for businesses. The government must ensure that any businesses disproportionately impacted by local lockdowns are given adequate support.”
Nearly two in five (38%) mid-tier businesses have furloughed additional staff following the new restrictions and extension of the Job Retention Scheme, suggesting that businesses are still grappling with uncertainty in the run-up to Christmas.
Regional approach
Fears also remained regarding the reinstatement of a tougher regional Covid-19 tier system. More than 8 in 10 (85%) businesses believe there will be a greater economic regional divide as a direct result of the tiering system.
The research showed that regional lockdowns have already caused a divide among businesses. Half (50%) of companies in the North East, an area that has faced stricter restrictions for a longer period than many other regions, have said they have not fully recovered from the first lockdown and think the impact of the current lockdown will be more severe.
The results also suggested businesses expect employees working from home to remain the norm for the foreseeable future, with nearly a third (32%) planning to invest in technology to support more remote working in the next six months.