Phone number: +44 (0) 208 662 6070

Key findings from the ICAEW Business Confidence Monitor 2020

Business Confidence Monitor

On the 30th November 2020, the ICAEW released its Business Confidence Monitor (BCM). The BCM is one of the largest and most thorough reviews of UK business confidence and provides a picture of the UK economy. The results are based on 1,000 telephone interviews of ICAEW Chartered Accountants and cover a wide range of UK industries, regions, and business sizes. The latest findings are based on a period between the 20th July and 19th October 2020.

The latest BCM reflects that UK business confidence is in negative territory, mainly due to the pandemic and the challenges associated with lockdowns and other restrictions enforced by the government. The impending end of the EU transition arrangements may have also affected businesses’ confidence. Some of the hardest-hit industries include transport, construction, manufacturing, and retail, whereas finance, utilities and IT are mildly higher than the UK average.

Below we highlight the key findings from the review:

General confidence 

The Business Confidence Index is negative, mainly due to the pandemic and the impending end of the EU transition arrangements. However, it is important to note that confidence is similar to a year ago, when Brexit was the biggest concern. Furthermore, confidence was much lower during the global financial crisis.

Businesses across all regions and nations are less confident about conditions for the next 12 months, however, confidence is lowest in London.


The first half of 2020 saw the largest decline in UK GDP ever recorded. A decline in Q4 is also likely due to the lockdown in England between the 5th November and 2nd December, though the effects should be less severe than in Q2.

GDP is slowly beginning to increase, highlighting that there is a chance of further recovery in 2021. However, this is dependent on containing the spread of the virus, and on how quickly vaccines can be developed and distributed.

Business challenges

There has been a noticeable increase in challenges and issues faced by businesses due to the pandemic including:

  • Customer demand

  • Late payment from customers

  • Transport problems

  • Difficulty in expanding into new areas

  • Additional costs e.g. new equipment needed to provide safe conditions for customers and staff

  • Difficulty in preparing for new trade when the transitionary arrangements between the UK and EU end in January 2021


Many companies have been forced to reduce their workforces, and levels are currently just below those in Q4 2019. The decline would have been much worse without the furlough scheme, which has now been extended until the end of March 2021. This scheme was particularly important during the first lockdown for industries such as hospitality, leisure, and culture. Unfortunately, the future of employment is still uncertain, with employers expecting very little change over the next year. Furthermore, investment is also down and expected to increase only slightly in 2021.

The East Midlands has seen the second-largest fall in employment, with only Wales experiencing higher rates.

Confidence by business size

The current situation of small and medium-sized companies (SMEs) appears to be no worse than larger companies, contrary to what the majority were expecting. The biggest variation is between large privately-owned businesses and UK listed companies, with the latter experiencing lower confidence.

London and South East Summit – Monday 7th December

The London and South East Summit is a new virtual event organised by the ICAEW and hosted by Tom Ahmad, one of the Directors of Bailey Ahmad Business Recovery and the current district President of the ICAEW Croydon. The event is based on the latest BCM and will take place over Zoom on Monday 7th December between 08.30 and 10 am. It is free for anyone to attend and offers a chance to hear from the ICAEW, Bank of England, and a high calibre line-up of panellists, as well as an opportunity to discuss how the local professional community can work together during a difficult time to emerge stronger in 2021. If you would like to attend, please register for free here: London and South East Economic Summit (