UK manufacturers have recorded the sharpest rise in optimism since 1973 amid growing demand as Covid lockdown measures are relaxed, the latest snapshot of activity from the CBI shows.
In a poll of 288 leading industrial companies, the employers’ organisation found business sentiment increased in the three months to April at the fastest pace since April 1973, as progress with the Covid vaccine raised hopes for a rapid return to relative normality later this year.
Manufacturers also plan to hire staff at the fastest rate since 1974 in the next three months, according to the survey, as firms take on more workers to prepare for looser Covid restrictions.
It comes after official figures showed UK unemployment fell for the second consecutive month in February. However, it follows the fastest rise in redundancies on record late last year, while almost 5 million workers remain furloughed with the economy still under pressure from the pandemic.
Rain Newton-Smith, the CBI’s chief economist, said a phased relaxation of restrictions had lifted the mood among firms, driving orders, employment and investment plans, but said it would take time for companies to recover from the worst recession in 300 years. “Continuing to support firms while they get on a steadier footing as restrictions ease will be crucial to recovery. The government should continue to work closely with business to ensure reopening is a success, while boosting competitiveness over the long term,” she said.
(March 8, 2021) Step 1, part 1
In effect from 8 March, all pupils and college students returned fully. Care home residents could receive one regular, named visitor.
(March 29, 2021) Step 1, part 2
In effect from 29 March, outdoor gatherings allowed of up to six people, or two households if this is larger, not just in parks but also gardens. Outdoor sport for children and adults allowed. The official stay at home order ended, but people encouraged to stay local. People still asked to work from home where possible, with no overseas travel allowed beyond the current small number of exceptions.
(April 12, 2021) Step 2
In effect from 12 April, non-essential retail, hair and nail salons, and some public buildings such as libraries and commercial art galleries reopened. Most outdoor venues can reopen, including pubs and restaurants, but only for outdoor tables and beer gardens. Customers will have to be seated but there will be no need to have a meal with alcohol.
Also reopen are settings such as zoos and theme parks. However, social contact rules still apply here, so no indoor mixing between households and limits on outdoor mixing. Indoor leisure facilities such as gyms and pools can also open, but again people can only go alone or with their own household. Reopening of holiday lets with no shared facilities is also allowed, but only for one household. Funerals can have up to 30 attendees, while weddings, receptions and wakes can have 15.
(May 17, 2021) Step 3
From 17 May people can be able to meet indoors in groups of up to six or as two households, or outdoors in groups of up to 30 people. People can also choose whether to socially distance with close family and friends, meaning that they can sit close together and hug. In care homes, residents can have up to five named visitors and be entitled to make low risk visits out of the home.
People can meet in private homes, or in pubs, bars and restaurants, which will all be able to reopen indoors. Weddings, receptions and other life events can take place with up to 30 people. The cap on numbers attending funerals will depend on the size of the venue.
Most forms of indoor entertainment where social distancing is possible will also be able to resume, including cinemas, museums and children’s play areas. Theatres, concert halls, conference centres and sports stadia will have capacity limits in place.
Organised adult sport and exercise classes can resume indoors and saunas and steam rooms will reopen. Hotels, hostels and B&Bs in the UK will allow overnight stays in groups of up to six people or two households.
People will also be able to travel to a small number of countries on the green list and will not have to quarantine on return.
Pupils will no longer be expected to wear face coverings in classrooms or in communal areas in secondary schools and colleges as a result of decreasing infection rates. Twice weekly home testing will remain in place. School trips with overnight stays will also now be possible.
(June 21, 2021) Step 4
No earlier than 21 June, the government had planned that all legal limits would be removed on mixing, and the last sectors to remain closed, such as nightclubs, would reopen. Large events would be able take place. However, the prime minister has said that the rise of the B.1.617.2 variant of coronavirus first detected in India may threaten this date, and health secretary Matt Hancock said it will not be confirmed before 14 June whether the government plans to stick to the timetable.
Peter Walker Political correspondent and Rachel Hall
Economists said manufacturers were more optimistic about the future with Brexit now largely in their rear-view mirror. Domestic orders expanded at the fastest rate since July 2018, while export orders were flat – although this was the strongest performance in two years after a period of intense uncertainty over Brexit.
However, manufacturers suffered a sharp drop in exports at the start of the new trading relationship with the EU because of border delays and extra paperwork. Exports have picked up in recent months, but friction is expected to form a permanent feature of the post-Brexit UK-EU trading relationship.
Average costs accelerated at the fastest pace since April 2011, reflecting the disruption caused by Brexit and Covid, and rising demand for goods and materials.
In the early 1970s Britain recorded the strongest GDP growth since the second world war – before a period of economic turbulence took hold towards the middle of the decade, with strikes and industrial unrest, galloping inflation, the three-day week, and the winter of discontent. Early in 1973 the economy was booming as Edward Heath’s Conservative government went for growth, fuelling a property bubble, before problems started in the autumn with the oil price shock caused by the Yom Kippur war and industrial action by the National Union of Minerworkers.
This year Britain’s economy is forecast to grow by 4%, followed by 7.3% next year – the fastest growth rate since 1948 – as the pandemic recedes, with GDP recovering its pre-Covid peak by the middle of 2022. However, concern remains over the extent of lasting scars. The recovery would also be derailed if new variants caused a growth of infections and a return to tougher government restrictions.
