Verdict has been conducting a poll to study the trends in business optimism during COVID-19 as reflected by the views of companies on their future growth prospects amid the pandemic.
Analysis of the poll responses recorded in August shows that optimism regarding future growth prospects decreased by three percentage points to 59% from 61% in July, reversing the improvement made in the preceding two months. The rise in cases related to the Delta variant and inflation concerns negatively impacted optimism during the month.
The respondents who were optimistic decreased by two percentage points to 23% in August, while those very optimistic remained unchanged at 36%.
The respondents who were pessimistic decreased by one percentage point to 10%, while those who were very pessimistic increased by one percentage point to 14%, from 13% in July.
The percentage of respondents who were neutral (neither optimistic nor pessimistic) increased by two percentage points to 17%.
The analysis is based on 1,197 responses received from the readers of Verdict network sites between 01 August and 31 August 2021.
Delta variant and inflation concerns rise in August
The Delta variant of the coronavirus was responsible for a steady increase in COVID cases in the US during August impacting business confidence during the month. Daily average of new COVID cases reached approximately 150,000 by the end of August, which is more than a ten-fold increase from 14,000 cases recorded on 01 July, according to the US Centers for Disease Control and Prevention (CDC).
Consumer confidence declined to 113.8, to the lowest recorded since February 2021, according to the Conference Board Consumer Confidence Index®. The percentage of consumers who anticipate business conditions to improve declined from 30.9% in July to 22.9% in August. Furthermore, 17.8% of consumers anticipate business conditions to worsen, as against 11.9% in July.
The rising fuel and food prices also negatively impacted consumers’ views on the existing economic conditions. The Expectations Index that assesses consumers’ short-term expectations for the income, business, and labour markets declined to 91.4 in August from 103.8 in July.
Similar trends were recorded across the European Union (EU) and Euro zone with the European Commission’s economic sentiment index (ESI) declining to 117.5 in August from a high of 119 in July in the Euro area and to 116.5 from 118 in the EU. The economic sentiment indicator (ESI) for the industry sector (industry confidence) declined by 4.7% month-on-month in the EU, while services confidence declined by 11.1%, consumer confidence declined by 12.5% and financial services confidence declined by 15.83%. While retail trade confidence declined marginally compared to July, construction confidence increased by 48% month-on-month reaching the highest in the last 12 months.