Executive Search in United Kingdom – 2020 Outlook
UK Waits for the Other Brexit Shoe to Drop
Having re-read the outlook I wrote last year, I’m struck by the irony that during a period of such change and volatility, the overall scenario itself remains so unchanged. It’s like the second half of ‘Waiting for Godot’; glad that you didn’t leave after the first act but still none the wiser after the second.
We wait for yet another year to find out what Brexit will actually mean and the final deal struck with the EU is the key piece of news that business is waiting for. We have an unnecessarily artificial cliff edge imposed by an ideological government dangling “no-deal” over the economy: it could still all go badly wrong…
In the meantime, the show must go on. There are inevitable bright spots shining through the clouds but the outlook is still overcast by Brexit weather. Productivity is chronically weak. Whilst outlooks are better than 2019, this is a marginal statement- GDP growth forecasts are low with PWC estimating 1.3% (better than 2019’s moribund 0.4%) and at least investment is almost out of negative territory. The British Chambers of Commerce report a forecast decline of 1.5% in business investment in 2019. However, that decline should reduce to just 0.1% in 2020 – hardly rosy.
Consumer confidence is better and this is perhaps best seen in the housing markets which in very simple terms correlate: a strong property market means that consumers are more confident in their spending. It should come as good news to UK businesses, then, that Savills is projecting UK house price growth of 4.0% in 2020.
In fact, 2020 looks set to be the strongest-performing year out of the whole 2019-2023 period, based on Savills’ predictions. Compound growth for that period is projected to be 14.8%.
As in 2019, consumer spending may offset the slump in business investment – with strong employment, steady wage growth and low inflation helping household finances.
But at the end of the day, all roads lead to the Brexit deal. Role on Act II…