On the back of a sunny Easter weekend, and as we enter a new financial year, it is undeniable that there is a sense of optimism in the air. After a gruelling year there is a sense that we have turned the corner and that, with vaccination now well under way, a return to normality is close.
This is reflected in two surveys this week, which not only show what life has been like over the last year, but hint at what it may look like going forward. The first, from YouGov, tracks the issues that consumers feel are the most important facing the country. The interactive graph can be found here, and reveals that 54% of us feel that health is one of the most important issues facing the country. Yet as the image below confirms, this has fallen from a high 75% in March 2020, when the pandemic first struck.
At the same time, the number of those that feel education is one of the biggest issues we face has dropped from a high of 26% in January to 18%, perhaps as schools reopened their doors to children and home schooling came to a close.
Concerns over Britain leaving the EU have also dropped from 63% on December 2020 to just 26% at the end of March 2021: yes, issues for exporters remain, but the world didn’t stop spinning when the UK left the EU and this is perhaps reflected in YouGov’s numbers.
This optimism is reflected in the IHS Markit/CIPS Purchasing Managers’ indices (PMIs), which reveal industry conditions in manufacturing, construction and services. PMI survey data collected between 12th and 26th March reveals that business optimism is at a seven year high, while UK manufacturing PMI rose to a decade-high of 58.9 in March, its best outcome since February 2011. Any score above 50 is positive, so this really does represent tangible real business confidence.
The Chartered Institute of Procurement and Supply (CIPS) claims this renewed optimism is supported by improved growth of output, new orders and employment, along with increased supplier lead times. Manufacturing output increased for the tenth successive month and at the quickest pace since last November.
We are not out of the woods yet
It’s important that we don’t get carried away in the light of this good news, however. The same YouGov survey reveals that those who believe crime is one of the most important issues facing the country has nearly doubled over the last few months, perhaps not coincidentally during a time when we have seen riots on the streets of the UK, and civil unrest seems to be on the rise.
Not surprisingly, the UK’s consumers are also concerned about the economy: 56% of us feel it is one of the most important issues facing the country, as the graph below shows. Interestingly, this figure really hasn’t changed much since March 2020, when the pandemic first hit the UK, and remains around twice the pre-Covid figure.
Concerns over the economy might be driven by the fact that the country has borrowed a lot of money to weather the Covid-19 storm, and this will have to be repaid at some point. Equally, many workers are still on furlough, and when the scheme comes to an end at the end of summer there is a concern that unemployment will increase as a result. CIPS itself notes that supply-chain disruption and inflationary pressures are building as the economy reopens, and as I have written before, the Chancellor of the Exchequer will need to keep a firm grip on the situation as life returns to normal, if he is to avoid excessive inflation.
Still, the next few months will be interesting and, as the green shoots of the economy start to show, it is understandable if there is a cautious note of optimism in the air. As I have said in the past, those businesses that have invested in technology, looked anew at their own systems and procedures, and pivoted to meet customer needs are well placed to reap the benefits as the vaccination programme continues at pace and the world reopens. They should have a head start on their competition.
So as we put Easter behind us, I think there is lot to be positive about, and to plan for, and there are certainly plenty of new opportunities in the marketplace. Agility is key for those organisations that have seen a fall in business, as their customers return and order books start filling again. The next six months should be interesting!
Stay safe!
