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The full impact of Covid-19 on mid-sized businesses has been revealed in an in-depth study by a leading audit and accountancy firm.

Grant Thornton launched its new index earlier this summer, tracking the health and outlook of mid-market companies during what has been the most difficult period in a generation for many.

Interestingly, while research shows the impact has been wide, many firms are trading more effectively than they had imagined with innovation key to helping them through the crisis.

In early 2020, data revealed a state of resilience and fragile optimism among the mid-market before Covid-19 forced a dramatic shift in the global social, business and economic climate.

Richard Ratcliffe, Director at Grant Thornton Isle of Man, explained: ‘The findings from our new index are encouraging and, while the data reveals just how far mid-market businesses have been affected, the cuts are perhaps not as deep as anticipated.

‘The results for every region, virtually every sector and 26 of the 29 monitored countries shows the pandemic impacted negatively on business outlooks and operating environments, but also highlights the steps businesses have taken to mitigate the impact.

‘The position could have been a lot worse given the severity of the downturn, as large swathes of the global economy were shut down, so the results were a pleasant surprise to the experts who work on the index.’

Developed by research partners Oxford Economics, it is made up of two elements:

  • future business conditions (including growth), economic optimism, and future investment intentions;
  • demand and supply constraints and economic uncertainty.

All three components of outlook – economic optimism, business conditions and investment intentions – fell markedly during the last six months, but there were several signs of strength across these areas. While growth expectations have been hit hard, a remarkable 34 per cent of mid-market firms around the world are still expecting an increase in revenues in the next 12 months.

Richard added: ‘The current environment has escalated concerns about falling demand and economic uncertainty, but it is clear many companies have shown real resilience and self-belief with technology a hugely important factor as businesses adapted to remote working.

‘The research is a valuable snapshot amid an evolving situation and one that will play out over some time to come. We will eagerly be looking to the next results to give us a better sense of whether the mid-market is holding up as well as we hope.’


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