Findings from the latest Business Confidence Survey by the Food and Drink Federation (FDF) suggest the industry is becoming increasingly optimistic about the future after a difficult couple of years when it faced the challenges of Brexit and the pandemic.
The FDF’s net business confidence measure rose in the first quarter of 2021 to -14%, compared to -34% in the final quarter of 2020, as a result of the vaccine rollout and the easing of lockdown restrictions.
However, businesses still continued to experience decreased domestic sales this year due to the low levels of activity in the hospitality and foodservice sectors.
Businesses were found to be relatively optimistic about UK economic conditions in 2021, with three quarters expecting business output to increase and two-thirds expecting business confidence to grow. Nonetheless, firms highlighted concerns regarding the unemployment rate and consumer price inflation, with more than half expecting them to rise in the upcoming months.
Key opportunities identified in 2021 included increased domestic demand (retail, hospitality and foodservice), planned investment in new product launches, and international trade opportunities. However, firms also faced barriers such as border and customs issues, cost of ingredients and cash flow issues.
Mark Harrison, Economic Research and Employment Policy Manager at the FDF, commented: “After a turbulent year, food and drink manufacturers are beginning to see the light at the end of the tunnel following the challenges of 2020 and early 2021.
“The successful rollout of the UK’s vaccine programme and the lifting of lockdown restrictions has meant that businesses are more confident than they were at the end of 2020. Increased business costs and issues with customs are still causing concern for our sector. However, the future outlook is positive with two-thirds of members expecting business conditions to improve as we head into the summer.”
