2022 Sector Outlook

Businesses ready to seize opportunities in 2022

View our 2023 sector outlook for the Midlands

Important lessons learned

Keith Ross, Head of Mid Corporate, Midlands, believes the region’s businesses see the year ahead as an encouraging landscape for growth.

Despite the many challenges, the majority of our clients not only pulled through 2021 but enjoyed some strong trading – although Covid lockdown restrictions obviously made it a difficult time for businesses in the hospitality and leisure (H&L) sector.

Businesses across the Midlands continued to apply the pandemic lessons they’ve learned about diversification and adaptability. I think this has fostered a new mind-set among many business leaders that recognises the importance of continually assessing and evolving their business plans. I think businesses have also got better at communicating with suppliers and customers to understand their needs and challenges, and at maintaining close relationships with their professional advisors.

Barclays has, of course, played its part in providing that support by facilitating the government-backed business interruption loan schemes, as well as through our more usual funding products and services. While that was important in helping clients to survive and many to prosper, supply chain constraints and the continuing environment of uncertainty in 2021 did persuade many companies to put growth plans on hold.

Despite extraordinary circumstances, including continued home working, I want to praise the fantastic job the Midlands teams did in ensuring continuing support for clients – and for colleagues too – throughout 2021. And I’m pleased to say that Barclays’ well-deserved reputation for helping businesses, built on the emphasis we put on building real relationships with companies, earned us some significant new clients across all industry sectors – from manufacturing, transport and logistics (MTL) to education and professional services.

Opportunities ahead

Provided concerns around the Omicron variant of Covid continue to diminish, I’m confident of an H&L sector recovery in 2022 – not just in the region’s towns and cities but also on the North Wales coast, where Zip World’s outdoor adventure parks is already enjoying so much success and is just one example of a business in this sector that is looking to grow. Of course, one would hope that H&L, along with every other industry sector, will benefit from the £778 million investment that is expected to be made in Birmingham and the West Midlands region to host the Commonwealth Games this year.

I’m just as confident about an upturn in the MTL sector right across our region. To spotlight the M5 corridor through Gloucestershire and Worcestershire as just one reason, we’ve seen a noticeable rise in the purchase of office and warehouse capacity and investment in plant and machinery, and I expect there to be continued growth of retail and business parks in the area.

There’s no doubt there are opportunities around the ESG agenda once companies work out how to incorporate it into their business operations. Another opportunity is greater collaboration between industry and the region’s many universities could offer the chance to develop innovative and market-leading products and services.

The Midlands is absolutely pivotal in terms of distribution hubs, so plans for a Freeport zone that includes East Midlands Airport – already the country’s largest UK cargo airport – should bring a new boost for trade and jobs, while I expect continuing growth for technology, media and telecoms (TMT) sector businesses supplying services that support the working-from-home revolution.

For Barclays, as the Covid impact hopefully lessens in 2022, there’s a great chance to get out and about again and do what we do best – building relationships with existing and prospective clients and all the different players that make up the financial services ecosystem.

Staffing and costs challenge

Conversations with clients at the moment nearly always feature the challenge of finding and retaining staff, with H&L the worst hit sector as employees take jobs as couriers or in distribution centres because pay has been boosted by the rise in online trading.

The other hot topic is inflation. Whether it be labour shortages driving up wages or supply chain challenges getting hold of materials (a lack of microchips is a particular worry for the TMT sector), businesses tell us they’re wondering if they’ll have to pass on those costs to customers.


While I’m upbeat about an H&L comeback in 2022, there are continuing challenges within the travel sector, particularly for businesses focused on overseas holidays. Pandemic restrictions are now being eased, but there is still a degree of uncertainty that makes prospects for the year ahead a bit of a guessing game.

Away from sector-specific concerns, all businesses will continue to see a rise in digital payments in 2022, especially with the contactless card limit rising to £100. Not only does this have ramifications for cashflow, but it also means businesses need the correct systems in place to counter increasingly sophisticated cyber-crime attacks. Failure to do so could be catastrophic.

Barclays leads the way in providing secure digital payment solutions for businesses but the lending support we and all other banks provide could be affected by uncertainty around the portability of government Covid loans. Talks are ongoing with the British Business Bank to make it easy to port facilities from one bank to another, but we’ll have to see how that plays out.

Summing up, I’d say that 2022 is an encouraging landscape. Yes, there are challenges, but having learned important lessons, businesses are more confident about investing in the future – and I believe Barclays is the bank to help them do that.

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