German-British business sentiment - autumn survey results
13 October 2021
The German-British business community is upbeat about its own activities in the UK but its sentiment for the economy overall is slightly less positive. Secondary effects of the pandemic and Brexit (logistical problems, shortage of supplies and skills) are gaining in prominence, in turn explaining its more cautious view on the British economy.
More than 50% of companies are positive or very positive about their own current and expected future performance in the UK. This continues to translate into investment and future employment, with a third planning to increase capital expenditure and half of them expecting to grow their workforce.
However, the overall development of the UK economy is viewed more cautiously, as only 27% expect it to perform better or significantly better over the coming nine months. This assessment is to some extent due to the Coronavirus pandemic, as 52% of companies think that a full recovery from it is still at least nine months off.
In terms of the largest challenges for businesses, logistical problems, shortage of skills and supplies have significantly moved up the agenda. Trade barriers/customs formalities and travel restrictions have moved from being the top two issues for the past 18 months to ranks 3 and 5, respectively. Yet a significant number of companies (34%) still need support with customs issues.
Nevertheless, the dust continues to settle in terms of plans to relocate some business activities. Now only one third of companies plan to relocate activities as a result of Brexit (last autumn 70% wanted to relocate some activities at least partly because of Brexit).
With regard to the upcoming COP26 meeting in Glasgow, it was found that the climate change agenda is important for a majority of companies but other ESG issues feature less prominently.
Dr Ulrich Hoppe, Director General of the German-British Chamber of Industry & Commerce, commented, "The survey results suggest that, despite the German-British business community being upbeat about their own operations, the effects of the Coronavirus pandemic and Brexit continue to somewhat weigh on the UK’s overall economic performance.”
71 online interviews were conducted with members of the German-British business community with UK operations. The study was part of the World Business Outlook survey of the Association of German Chambers of Industry & Commerce. Fieldwork was conducted between 1 October and 10 October 2021. The full results can be found here.
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