ECI Growth Index shows 65% of growth business owners still predicted growth after the pandemic outbreak

07/12/2020
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We’re delighted to launch our 2020 ECI Growth Index, which shows that two thirds of growth businesses still predicted growth after Covid-19 struck. Of the 403 respondents surveyed,  44% predicted growth of 11% or more. Whilst this is certainly a positive sign given the mass market disruption that has occurred as a result of the Covid-19 crisis, this is down from 88% of businesses predicting growth this year prior to the pandemic officially being declared. 

The ECI Growth Index is the longest running survey focusing on growth companies in the UK, which is now in its 11th year. The Index polls business sentiment and analyses the key concerns and opportunities for these businesses. 

Sector resilience 

According to our resilience analysis, TMT was the sector which was most resilient to the crisis, with four fifths (80%) of TMT businesses defined as resilient, followed by business services (77%), healthcare (74%) and financial services (74%). Despite the ongoing challenges facing the consumer sector as a result of the pandemic and the ever-changing lockdown restrictions, 72% of consumer businesses were still classed as resilient.  

International businesses leading the charge 

Despite ongoing political uncertainty, 84% of growth businesses expect overseas growth in the next 12 months. Interestingly, our analysis showed that less resilient business are three times more likely to only operate domestically when compared to resilient businesses. The correlation between resilience and having an international operation may be a driver behind the high percentage of businesses looking to expand globally.

Obstacles to growth 

Perhaps most surprisingly, despite it dominating the news headlines for the last four years, Brexit was not deemed as a key concern for businesses when asked about potential obstacles to their future growth, with less than a quarter (23%) of business leaders classing Brexit as a top short-term concern for their business. 

Tom Wrenn, Partner, comments: 

In a year of unprecedented change and upheaval, it is encouraging to see that most of the UK’s fastest growing businesses are still forecasting growth.

This year has demonstrated the importance of resilient business models as companies face the challenge of Covid-19. While it may come as no surprise that TMT business have proven to be the most resilient, it was positive to see how impressively businesses across all the sectors we surveyed fared, given the difficulties under which they have operated. With the majority of ECI-backed businesses operating internationally, it is also promising to see the positive impact of diversified global revenues on resilience, and I expect that businesses growing internationally will have a leading role in the UK economy and its recovery from Covid-19.

Brexit not being deemed as a top priority for firms is surprising yet encouraging for the post-Brexit world we will soon be faced with. It is a positive sign, but whether this is because it has simply been superseded by prevailing ‘known’ threats will play out in the coming months.

While we can’t predict what the future holds for businesses, what we do know is that there will be real value in companies that can show that they treated their customers and people fairly, faced adversity head on, and demonstrated both growth and resilience in a year of unforeseen challenges.”

Tom Wrenn

Partner

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