The rapid rollout of Covid-19 vaccines across Europe has led to business confidence hitting its highest levels in three years.
According to IHS Markit’s global business outlook survey, business confidence now stands at +32 per cent, up from +26 per cent in October.
The increase has been driven by the success of the vaccine rollout, especially in the UK, which has left firms more confident that restrictions will soon be lifted.
More than 24m people have now received their first dose of a Covid-19 vaccine in this country.
After tumbling during the pandemic, service confidence has bounced back especially strongly in Britain, the survey showed.
UK firms were the most upbeat towards job creation, with hiring optimism the strongest since mid-2015.
As well as increased hiring confidence, last month also saw a resurgence in planned capital spending.
With a lot of investment cancelled or postponed during the pandemic, companies upped their capex goals for the coming 12 months.
After being negative at the end of last year, the UK’s capex intentions have now turned positive due to the vaccine rollout.
Firms wavering over whether to invest may have been swayed by government’s decision to introduce a tax super-deduction on spending at last week’s Budget.
Finally, the survey showed that firms are increasingly willing to lift research and development spending (R&D) over the course of the coming 12 months.
Alongside the UK, sentiment also picked up considerably in France, Ireland, Italy, Germany, and Spain, although they are not vaccinating at the same pace as Britain.
On the other hand, optimism was unchanged in Brazil, China, Japan and the US, all of which had already seen strong improvements in confidence late-last year.
Commenting on the survey, Pollyanna De Lima, economics associate director at IHS Markit, said:
“The February results showed a noticeable improvement in global business confidence to the brightest since early-2018.
“Optimism towards business activity and employment has strengthened on the back of COVID-19 vaccine rollouts and hopes that social distancing and travel restrictions will end.
“Firms intend to expand operating capacities by replacing staff laid off due to the pandemic, amid efforts to cope with expected increases in new work. In particular, we’ve seen notable rebounds in sentiment towards output and jobs across Europe.”