Almost all businesses forecasting high growth in 2021 plan to invest more, reveals HSBC

According to HSBC Navigator Report 2020, a distinguishing characteristic of companies expecting high growth (of more than five per cent in 2021), is that the vast majority of them (89 per cent) are going on the offensive by increasing their investment.

By contrast, the report states that more than half of the businesses expecting lower sales are planning retrenchment, with four in ten (42 per cent) expecting to reduce investment. 

Navigator 2020 drew on the views of over 10,000 companies in 39 countries and territories.

The survey was carried out between 11th September and 7th October 2020.

It found that 8 per cent of companies expect 2021 to be more profitable than before the COVID outbreak, and 45 per cent expect to return to pre-COVID profitability by the end of 2021.

On the other end of the spectrum, 6 per cent of businesses expected to only begin to claw back ground lost during the pandemic from 2024. 28 per cent and 11 per cent of business expect it will take until the end of 2022 and of 2023 respectively.

The report reveals that 64 per cent of companies project a sales growth in the year ahead, down 15 per cent from a year ago.

The proportion of companies not expecting a growth in profit has doubled to 24 per cent. 

Surveying the plans of businesses, the report notes that digital is a key to success during the pandemic, with “high growth” companies now making most sales online.

Furthermore, 32 per cent of high growth firms expect technology-driven efficiencies to be key drivers for their recovery. 

HSBC reveals that the workforce is a key priority for high growth firms, with 90 per cent planning to upskill employees and invest in staff wellbeing. 

The vast majority of companies surveyed (86 per cent) think efforts to boost their sustainability performance will help increase sales. 

Asked to explain their outlook for the coming years, three quarters of businesses are positive on their international trade over the next two years, and two in five see broader horizons and new sources of insight as a benefit. 

Many businesses also believe international trade promotes positive social outcomes by boosting local economies (30 per cent) and supporting the development of local infrastructure (24 per cent).