New figures from the Office for National Statistics have revealed that consumer spending in the retail arena rose 13.9% in June to return to close to the levels seen before the Coronavirus pandemic. Private sector business activity in the UK also grew at the fastest pace for over five years as businesses and consumers alike returned to more normal trading and spending habits.
Other figures, however, paint a more gloomy picture as manufacturing exports saw a retraction not seen since the financial crisis of 2009. New research from the Federation of Small Businesses (FSB) showed that one in five firms have been forced to cut staff due to the pandemic and lockdown.
Luke Davis, CEO and Founder of SME investment firm IW Capital, commented on the announcement:
"These figures demonstrate the vital importance of small, consumer facing businesses. These were the firms worst affected by lockdown and their resurgence will be key to returning to economic growth in the coming months. Companies with high exposure to consumers need to be supported in their recovery and as private finance providers we have a responsibility to be a part of this. Private equity finance especially will be key as firms attempt to stay away from further debt that often creates cash-flow issues in what is already a difficult business environment.
The extent of Government loans - especially the bounce back loan scheme - has seen over a million firms go into debt and has led many to call for a suspension of payments until they return to profitability. Among the businesses that took out these loans there will be thousands that will roar back to trading and growth if given the opportunity, they will be the drivers of economic recovery.
With an economic contribution of over £2trillion, the success of the UK economy as a whole may in future hinge on the prosperity of SMEs, start-ups and high-growth firms. We have seen that businesses have been eager to grow and strive in a post-COVID economy and as businesses prosper once again, confidence in the UK economy as a whole will grow. This does not only apply to big tech but retail, FMCG and hospitality - key sectors before that will be again."