Sluggish global economy has impact

New research from business and financial adviser Grant Thornton UK LLP has found that the economic after-effects of the pandemic are a significant concern for West Midlands based mid-market businesses that are looking to grow internationally. 

With changing restrictions and continued uncertainty, more than three quarters (76%) of mid-market business leaders in the region believe that it is harder to grow their business internationally today than it was before the pandemic.

The biggest challenges to international growth for the West Midland companies included in Grant Thornton’s survey are: 

• Lack of global economic growth (52%)
• Political regime change (46%) 
• Third wave of Covid-19 (36%)
• Mobility of talent (32%) 

Dave Hillan, partner and practice leader at Grant Thornton UK LLP in the region, said: “The global economic slowdown that was exacerbated by COVID-19 adds another layer of complexity to all of the uncertainty that businesses are already dealing with.

"Some sectors, such as travel, tourism and hospitality, have obviously been harder hit over the past year by the extension of restrictions, but a lack of global growth and ongoing changes to guidance and deadlines affect all businesses. 

“Whilst the UK’s success in vaccinating its own population adds a level of confidence on the domestic front regarding fears of a third wave, this needs to be mirrored internationally in order for the global community to be able to move forward together.

"Businesses in the West Midlands that trade internationally are clearly finding the current operating environment difficult and will likely have been reassured by the G7 leaders’ pledge to ‘vaccinate the world’ - an important step in getting the world’s economy back on track.

“Though the international economic outlook is the primary concern for the West Midland’s mid-market leaders, businesses are also dealing with the potential for a third and disruptive wave of the virus, ongoing complexity in their supply chains, and trying to embed some of the positive changes to the ways of working that have been accelerated by remote working.

“Our Business Outlook Tracker data, collected in bi-monthly surveys of mid-market leaders, shows that the mid-market is feeling slightly less optimistic about the outlook for the UK economy than they were at the beginning of this year (-4pp from January to June), although it also reveals that their expectations for profit levels have increased significantly (+18pp from January to June).

"This tells us that leaders are confident in their own business’s ability to weather the changes, and accept constant, unpredictable change as a given.”