Business optimism improved in June 2022 compared to May 2022, even amid concerns about rising costs and declining demand, an analysis of an ongoing poll by Verdict revealed.
Verdict conducted the poll to study the trends in business optimism during COVID-19, as reflected in companies’ views on their future growth prospects during the pandemic.
Analysis of polls recorded in June 2022 shows that optimism about future growth prospects rose by five percentage points to 63% of 58% in May 2022†
Those who were optimistic fell two percentage points to 22% in June, while those who were very optimistic rose from 34% in May to 41%.
Respondents who were pessimistic fell by two percentage points to 8% in June, while respondents who were very pessimistic fell by two percentage points to 14%.
The percentage of respondents who were neutral (neither optimistic nor pessimistic) fell by one percentage point from 16% in May to 15%.
The analysis is based on 363 responses received from readers of Verdict networking sites between June 1 and June 30, 2022.
Business confidence remains at the long-term average in the UK
Business confidence in the UK remained similar to the long-term average of 28% in June, although month-on-month confidence fell by ten percentage points, according to the Lloyds Bank Business Barometer. High inflation, rising costs and declining demand were some of the concerns businesses faced. The East of England reported the largest increase in business confidence from 14% to 31%.
The ONS Business Insights and Conditions Survey for the two weeks ended June 26, 2022 further indicated that 17.6% of respondents in the UK believed their business performance will improve in the next 12 months. In addition, up to 50% of respondents expected business performance to remain the same, while 13.7% expected it to decline.
French and Italian companies report more confidence in June
The National Institute of Statistics and Economic Studies (INSEE) further indicated that business confidence in France rose from 106.3 in May 2022 to 107.6 in June 2022. New orders, improved production expectations and an expected increase in their workforce in the The coming months contributed to the improved sentiment.
The business environment improved significantly in the manufacturing sector in France to 108 in June from 106 in May, while in the construction sector from 114 in May to 115 in June. Contractors remained much more positive about their past activity than in May, although they were less optimistic about expected activity over the next three months.
Similarly, Italy reported an increase in confidence from 110.6 in May to 113.6 in June, according to the Istat Economic Sentiment Indicator (IESI) index. Confidence improved especially in the manufacturing sector from 109.4 in May to 110 in June. Favorable calculations on the order books, better production expectations and an estimated increase in inventories boosted business confidence.
The construction confidence index also improved from 158.7 in May to 159.7 and from 103.8 to 109.1 in the market services sector. In retail, the confidence index rose from 105.8 in May to 107.2 in June.
Companies remain optimistic in the US and Canada
The latest MetLife & US Chamber of Commerce Small Business Index hit its pandemic-era high with a second-quarter score of 66.8%, compared to its latest quarterly score of 64.1 in 2022. Small businesses named inflation their biggest challenge, followed by supply chain disruptions and the impact of COVID-19. The Business Council of Alberta’s Business Expectations Survey revealed that optimism about Alberta’s economic outlook remained high. The survey found that 78% of respondents reported an improvement in forward-looking indicators, while 65% expect sales to increase over the next 12 months. However, employment and financial constraints are expected to impact business activity over the next 12 months.