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U.K. Businesses Strive for Growth Amid Possible Recession, Third Annual J.P. Morgan Survey Finds
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J.P. Morgan's third annual U.K. Business Leaders Outlook survey reveals that 42% of U.K. business leaders are preparing for a possible recession or believe one is already happening, down 25% from 2023. Despite this, optimism around company and industry performance has increased, with 78% expecting revenue and sales to increase in the year ahead. Rising interest rates and uncertain economic conditions remain top challenges, with 79% citing inflation as increasing the cost of doing business. Business leaders plan to focus on growth by introducing new products and services, prioritizing profitable products, seeking strategic partnerships or investments, expanding into new international markets, and increasing headcount.
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Rising interest rates and uncertain economic conditions continue troubling local business leaders
LONDON--(BUSINESS WIRE)--
U.K. business leaders are meeting optimism with caution as four-in-ten (42%) are preparing for a possible recession or believe we are already in one, which is down 25% from 2023, according to J.P. Morgan’s third annual U.K. Business Leaders Outlook survey.
Recession expectations among UK midsize business leaders (Graphic: Business Wire)
In a survey of nearly 300 C-suite executives from U.K. businesses, optimism around company (82%) and industry performance (75%) has increased over the past year, and as a possible result, decision-makers are expecting revenue and sales to increase in the year ahead (78%).
“It’s been another tricky year for the local business community as interest rate hikes and an inflationary environment has left U.K. businesses feeling the pressure,” said Catherine Pierre, Head of Commercial Banking U.K., J.P. Morgan. “As we head into 2024, despite a possible recession, business leaders are gearing up to react accordingly—while also forging ahead with plans for thoughtful growth.”
However, despite their confidence, less than half remain optimistic for the global economy (48%) and national economy (43%) as persistent challenges continue to create hurdles for business leaders. Rising interest rates (40%) and uncertain economic conditions (38%) are among the top challenges for U.K. business leaders, with more than three quarters of respondents citing inflation is increasing the cost of doing business (79%).
Pressing on, Aiming for Expansion
Even with ongoing economic pressures, the U.K. business community is focused on growth. In the year ahead, business leaders plan to grow their businesses by:
Introducing new products and services (51%)
Prioritising their most profitable products (46%)
Looking to strategic partnerships or investments (41%)
Expanding into new international geographical markets (39%)
Expanding into new distribution channels (39%)
Additionally, four in ten U.K. business leaders say they expect to increase their headcount (40%) in 2024, while about the same amount (41%) plan to maintain their current headcount.
Finding Paths Toward Growth Through Financing
To help counteract the effects felt from an uncertain economy, 58% of U.K. respondents expect their credit needs to increase in the year ahead, while down 10% from 2023, only 5% expect their credit needs to decrease.
The most utilised type of financing currently is bank lines of credit (52%), though just over a quarter (27%) plan to use this in the year ahead.
Adoption of Artificial Intelligence
While 21% of U.K. respondents say the adoption of artificial intelligence (AI) is one of the most significant challenges facing their business, the majority (79%) report they are already using or are considering using AI tools, such as generative AI and language processing software, in the year ahead.
“The mounting interest in AI from businesses continues and, on the back of the Government’s AI summit late last year, it’s something that policy makers are expected to keep a close eye on too,” said Pierre. “The breadth of use businesses have for AI speaks to the ways in which they’re looking to innovate and adapt to be better prepared to do business in today’s world.”
Survey Methodology
J. P. Morgan’s U.K. Business Leaders Outlook survey was conducted online from November 16 – December 13, 2023. In total, 279 business leaders (CEOs, CFOs, heads of finance and owners) from U.K. midsize companies (annual revenues generally ranging from £20 million to £2 billion) across various industries participated in the survey. Results are within statistical parameters for validity, and the error rate is +/- 5.6% with a 95% confidence level.
About JPMorgan Chase
JPMorgan Chase & Co. (NYSE: JPM) is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorgan Chase had $3.9 trillion in assets and $328 billion in stockholders’ equity as of December 31, 2023. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
JPMorgan Chase in U.K. With a legacy dating back to 1799, JPMorgan Chase has a track record of demonstrating leadership during times of both economic growth and financial instability. The firm employs approximately 20,000 employees throughout the U.K. and is committed to operating a healthy and vibrant company that plays a leading role in advancing a sustainable and inclusive economy. JPMorgan Chase works every day to apply its unique expertise, insights, and resources to help address economic and societal challenges facing its clients, employees, and communities. It helps local communities achieve their dreams by lifting up individuals, companies of all sizes, schools, hospitals and governments.
What percentage of U.K. business leaders are preparing for a possible recession or believe one is already happening?
42% of U.K. business leaders are preparing for a possible recession or believe one is already happening, down 25% from 2023.
What percentage of business leaders expect revenue and sales to increase in the year ahead?
78% of business leaders expect revenue and sales to increase in the year ahead.
What are the top challenges for U.K. business leaders?
Rising interest rates and uncertain economic conditions are among the top challenges for U.K. business leaders, with 79% citing inflation as increasing the cost of doing business.
What are the growth plans for U.K. business leaders in the year ahead?
U.K. business leaders plan to focus on growth by introducing new products and services, prioritizing profitable products, seeking strategic partnerships or investments, expanding into new international markets, and increasing headcount.
JPMorgan Chase & Co. is an American multinational financial services firm headquartered in New York City and incorporated in Delaware. It is the largest bank in the United States and the worlds largest bank by market capitalization.
