The latest BCC Quarterly Economic Survey reveals a dismal outlook among British businesses through the first quarter of the year, possibly on account of the lockdowns that were imposed by the government. All the key indicators of the survey remained in negative territory, indicating pessimism among companies, although business confidence has been lifted over hopes of the COVID-19 vaccine rollout and the easing of the lockdowns soon.

Around 40% of the companies registered a decline in their domestic sales, and the worst affected were B2C businesses with consumers forced to remain at home through the lockdown. Meanwhile, 35% of businesses in the professional services as well as marketing and media sectors saw their sales climb higher, by 29% and 28% respectively from Q4 2020 to Q1 2021.

41% of companies experienced a reduction in their cash flow, especially among those in the hotel and catering sectors. On a positive note, 55% of participants anticipated an improvement in their turnover during the coming 12 months – this is the highest level of optimism seen in a year.

Co-executive director at BCC, Hannah Essex, states, “The hope for growth represented in our findings is contingent upon the government continuing to hit its target dates for reopening the economy, successfully rolling out the coronavirus vaccines and providing ongoing support to businesses who have suffered throughout the crisis.”

After posting a 1.3% growth during Q4 2020, the UK economy is expected to experience a contraction during the first quarter of the year on account of the fresh lockdowns imposed to combat the second wave of the pandemic. However, economists anticipate conditions to improve on the back of a strong vaccine rollout program in the second quarter of 2021.