Since the turn of the year, through our third national lockdown and as the economy starts to pick up as the vaccine roll out continues apace, we have been exploring the opportunities and risks facing businesses as they look to navigate to recovery.

In a recent roundtable, hosted by London First, we gathered a collection of senior business leaders from across the Capital and from a mixture of industries to explore the current environment and understand leaders’ anxiety and optimism about the future.

One initial surprise was how clearly focused all were on growth. There seemed little concern that opportunities for growth had disappeared. And, as one participant stated, there is a stark difference between this recession and the global financial crisis. Consumer confidence – in the near term at least — is pretty high, and the employment markets remain quite buoyant. Also, unusually, the pain of the downturn has not been felt across the board — unlike previous economic downturns. Some sectors have flourished, others have experienced profound difficulties. 

Optimism is high but uncertainty abounds

While all were encouraged by the prospect of growth, there is still a lot of uncertainty around changes in consumer behaviour and priorities. This ties in with our recent ‘changing consumer priorities’ research which has identified health and financial worries being the key drivers of consumer attitudes. Change. Understanding the permanence of these changes is still tricky, even against a backdrop in the UK of high levels of positivity regarding the vaccine. 

Either way, it was agreed that Summer could bring good news, but the autumn would be tough, and concerns still linger around new waves and/or variants of Covid-19 towards the end of the year. Against that backdrop, few expected a complete return to ‘normality’ until mid 2022. 

Many around the table also highlighted that the major uncertainty was how the Government would look to recoup its Covid support costs and the implications for, among other things, tax rates. The Autumn Spending Review was likely to bring some clarity. 

Debt looms large for many

One of the reasons many have weathered the pandemic is due to unprecedented levels of financial support from the Government and the low cost of borrowing. However, there was a view that this would come home to roost for businesses who had not seen the pandemic as a wake-up call if carrying already high levels of debt, and for businesses yet to tackle some of their underlying frailties. 

It certainly seems that there will be clear winners and losers – office space, life sciences and logistics were all flagged as potentially attractive sectors. Also, businesses that had avoided any legal liabilities and had avoided unnecessary borrowing could experience a positive end to 2021.

Interestingly, the property businesses around the table suggested a more sympathetic hearing was likely for healthy businesses navigating their way back to prosperity when it came to rent discussions. 

Finally, there was a strong, shared view that continually borrowing through the crisis was unsustainable and those businesses that had been slow to restructure for growth were likely to face a tough time as we returned to normal, new or otherwise. 

This article originally appeared on the London First blog