UK business optimism rose to its the highest since 2015, fuelled by the rollout of the COVID-19 vaccination
programme, according to the Accenture/ IHS Markit UK Business Outlook.
More than six times as many UK private sector firms (68%) expect an increase in business activity during the year
ahead as those that forecast a reduction (11%). At +57% in February, the resulting net balance was up sharply from
+34% last October, signalling the highest levels of business optimism since June 2015. At +37% (up from +15% in
October 2020), the net balance of UK firms anticipating an improvement in profits also reached its strongest in over
The improvement in UK business confidence in recent months has largely been driven by a rebound in the service
sector, with its net balance rising from +32% to +56% in February. Service providers widely commented on a boost to
business expectations from vaccine progress and the forthcoming reopening of domestic hospitality after lockdown
restrictions, alongside positive signals for both business and consumer spending.
The net balance of manufacturing sector companies expecting a rise in production reached +62%, up from +50%.
Growth projections were boosted by hopes of a continued recovery in global manufacturing conditions and signs of
rising demand from clients in the US and Asia.
Commenting on the survey, Rachel Barton, Strategy & Consulting lead at Accenture UK & Ireland, said: “After
a tough year it is encouraging to see business confidence bouncing back. Although we are not out of the woods yet, it
is important for UK business to take advantage of this confidence in order to build a sustainable recovery.
“Change is a constant factor at the moment, but a positive mindset can be a self-fulfilling prophecy so hopefully
companies will follow through on the investment and growth plans we see in this survey to take us through the
Hotels & restaurants moved from the least confident service category in October 2020 to by far the most
optimistic in February (+79%). Transport recorded the lowest degree of confidence (+37%) and was the only part of
the service sector to signal a drop in expectations since last autumn, which was mainly attributed to concerns about
the duration of international travel restrictions and persistently subdued domestic demand amid the pandemic.
The survey also showed signs of some economic headwinds, with rising expectations of inflationary pressures
over the next 12 months. For example, the net balance for non-staff costs registered +39% in February, up from
+25% last October and the highest reading since the start of the pandemic.