New research from leading business and financial adviser Grant Thornton UK shows that the economic aftershocks of the pandemic remain a significant concern for Thames Valley businesses that are looking to grow internationally.
With changing restrictions and continued uncertainty for many, two thirds (66%) of 611 mid-market business leaders surveyed from across the UK believe that it is harder to grow their business in overseas markets today than it was pre-pandemic.
The biggest challenges to international growth identified by Grant Thornton’s survey are a third wave of Covid-19 (45%), political regime change (42%), mobility of talent (39%) and lack of global economic growth (37%).
Jim Rogers, practice leader for Grant Thornton in Thames Valley, said: “The risk of a third wave of the virus in the UK adds another layer of complexity to all of the uncertainty that businesses are already dealing with. The disruption effects everyone and creates a range of challenges, even for e-commerce and software-as-a-service providers, a sector which has experienced dynamic growth. Other areas, such as travel, tourism and hospitality, are obviously harder hit by the extension of restrictions, but ongoing changes to guidance and deadlines affect all businesses.
“The UK’s success in vaccinating its own population adds a level of confidence on the domestic front, but this needs to be mirrored internationally in order to be able to move forward collectively together. Businesses trading internationally are clearly finding the current operating environment difficult and will likely have been reassured by the G7 leaders’ pledge to ‘vaccinate the world’.
“The political context is always changing, but we are in a period where we are making new trading relationships as a result of Brexit and we’ve had a change from Trump to Biden in the White House along with all the trading issues associated with the pandemic.”
Grant Thornton’s 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 (-4 percentage points from January to June), although it also reveals that their expectations for profit levels have increased significantly (+18 percentage points from January to June). “This tells us that leaders are confident in their own business’ ability to weather the changes, and accept constant, unpredictable change as a given,” added Rogers.