Glimmer of hope as UK economy starts to emerge from the ashes

The number of businesses with a positive outlook for the next 12 months exceeds the number with a negative outlook for the first time, in the clearest sign yet that parts of the economy are slowly springing to life, according to the latest wave of the Opinium-Cebr Business Distress Tracker.

However, despite the UK is still not out of the woods. The latest Tracker suggests that more than half a million (544,000) businesses are at a high risk of entering insolvency as a result of coronavirus-related disruption – up from 510,000 two weeks ago.

The picture varies considerably across sectors. Half of businesses (50%) in manufacturing & construction say that current trading conditions are good, compared to just over a quarter (28%) of service sector firms.

The survey results pour more cold water on the notion of a V-shaped recovery, as the average anticipated recovery time rises by three weeks to 31 weeks. The pattern observed in recent weeks suggests that the longer the lockdown persists, the longer the recovery will take.

The most commonly cited drivers of the delay in raising production are reduced demand from customers, a weakening of business-customer relationships, and reduced access to inputs necessary for production. Meanwhile, more than two-fifths (43%) of businesses are concerned about a deterioration in the skills and productivity of workers that have been placed on furlough.