Business optimism improves for the second straight month in July: Poll
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Business optimism improves for the second straight month in July: Poll

05 Aug 2021

Business and consumer confidence improved in July backed by increase in consumer spending and hiring.

Business optimism improves for the second straight month in July: Poll
Credits: Monster Ztudio/Shutterstock.com.

Verdict has been conducting a poll to study the trends in business optimism during COVID-19 as reflected by the views of companies on their future growth prospects amid the pandemic.

Analysis of the poll responses recorded in July shows that optimism regarding future growth prospects increased to 61% from 60% in June marking the second straight month of improvement in business optimism. Easing of COVID restrictions and increase in the rate of vaccination had led to improvement in business optimism in June.

The respondents who were optimistic increased by two percentage points to 25% in July, while those very optimistic decreased by one percentage point to 36%.

The respondents who were pessimistic increased by one percentage point to 11%, while those who were very pessimistic declined by two percentage points to 13%, from 15% in June.

The percentage of respondents who were neutral (neither optimistic nor pessimistic) remained unchanged at 15%.

Business optimism improves for the second straight month in July

The analysis is based on 1,697 responses received from the readers of Verdict network sites between 01 July and 31 July 2021.

Increase in consumer expenditure and hiring boost optimism

Optimism among small businesses in the US increased for the first time since January this year, according to the National Federation of Independent Business report. The optimism increased from 103.6 in June to 105.2 in July owing to improved economic outlook, strong consumer demand, and solid hiring activity.

Consume confidence in the US improved from 128.9 in June to 129.1 in July and was the highest recorded since February 2020, according to the Conference Board’s Consumer Confidence Survey®. Consumer optimism continued to increase as a large percentage of consumers plan to increase expenditure and purchase homes and major appliances.

Similar improvement in business confidence was witnessed in Italy and Brazil. The business confidence index increased from 112.8 in June to 116.3 in July, according to the Italian National Institute of Statistics’ (Istat) Economic Sentiment Indicator. Consumer confidence index also improved from 115.1 in June to 116.6 in July.

Brazil’s Business Confidence Index (BCI) reached an eight-year high in July to 101.9, an increase of 3.1 points compared to the previous month, according to Getulio Vargas Foundation (FGV), an economic think tank. The increase was registered in four major sectors including commerce, construction, industry, and services.

Business confidence in four regions of the UK including East Midlands (seven point increase to 38%), the North East (13 point increase to 40%), North West (nine point increase to 38%), and West Midlands (one point increase to 30%) increased, although the overall business confidence index in the country declined owing to delay in easing of COVID restrictions, according to the Business Barometer from Lloyds Bank Commercial Banking.