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Mid-market’s profit expectations plummet to lockdown low

  • Date 2 Jan 2022

As restrictions start to be re-imposed as part of the government’s ‘Plan B’ to manage the potential impact of the Omicron variant, new research from Grant Thornton UK LLP’s latest Business Outlook Tracker* finds that profit growth expectations in the mid-market have plummeted to an annual low.
Only 33% of 601 mid-sized businesses surveyed in early December expect to see an increase in profits in the next six months, a significant reduction when compared to July (67%). This is a low not seen since March, and is the lowest level recorded by the Tracker this year.

The latest survey finds that mid-sized businesses are less confident in their future performance than they were earlier in the year:

-17 percentage point (pp) drop in optimism around future revenue growth compared with July where it reached an annual high, in line with ‘freedom day’
- Only 64% are confident in their company’s funding position, falling -10pp compared to the last Tracker in October and reaching the lowest level since March.

Despite positive forecasts for the UK economy from the OBR, the latest Business Outlook Tracker finds that the mid-market’s confidence in the economy has continued to decline since July (65%, December compared to 79%, July). The bi-monthly research also recorded a significant drop across the whole year, with the number of businesses confident in the economy falling -15pp compared to January (high of 80%).

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