According to a new report from EQ Riskfactor, 68% of U.S. businesses said they are more profitable today than they were before the COVID-19 pandemic compared to 71% of UK businesses. Similarly, 85% of U.S. businesses said they are optimistic about their business and growth during the rest of 2022 and 2023 compared to 90% in the UK market.

The report, titled the Global Business Borrower Report, provides a snapshot of current business sentiment in five markets: the United States, the United Kingdom, France, Germany and the Netherlands. To compile the report, Equiniti surveyed close to 500 businesses in a range of sectors across the United Kingdom, United States, Germany, France and the Netherlands about their current outlook and conditions. The survey consisted of 27 questions and was conducted in Q2/22.

Across all five markets, a clear majority (80%) of all businesses surveyed said they are optimistic about their business and growth during the rest of 2022 and 2023, including 28% who said they are extremely optimistic. Within mainland Europe, 80% of German businesses described themselves as confident, followed by France (76%) and the Netherlands (69%).

Nearly two-thirds (65%) of all European businesses surveyed also said they are more profitable today than they were before the COVID-19 pandemic, with France at 69%, Germany at 67% and the Netherlands at 43%.

“Despite concerns about the direction of the economy and a potential recession, it’s encouraging to see that U.S. businesses still have a positive outlook,” Aaron Hughes, CEO of EQ Riskfactor, said. “The businesses that have managed to stay afloat through the last few tough years are typically the most resilient. Many of these have also had to undergo some degree of cost-cutting in the last two years, as they were forced to right-size their cost base. This cost-cutting has put many companies in a strong position to profit from the reopening of the economy, but they will still have to face the substantial challenges that lie ahead.”

Despite this optimism detailed in the report, there are certainly some major concerns on the horizon. As the fallout from the pandemic continues, almost a third (31%) of U.S. businesses said that COVID-19 is still the biggest challenge they face. This was followed by worries about rising energy bills and inflation, which was highlighted by 17% of U.S. businesses, and supply chain disruption, which was selected by 14%.

Staff procurement was less of a concern in the United States, cited by only 9% of businesses as their biggest concern. Difficulties with the labor market were emphasized by more European businesses as a top concern, with 18% of German businesses ranking this first, followed by the Netherlands (14%), and France (11%). Just 7% of UK businesses pointed to labor market issues as a major concern.

Rising energy bills and inflation was a key concern across all respondents. Almost half (49%) of all businesses surveyed listed it in their top three worries. Similarly, 45% of all businesses put supply chain disruption in their top three concerns.

“There are certainly major challenges on the horizon, even for these resilient businesses. While concerns about the labor market have been loudly publicized, particularly in the U.S., it looks like the ongoing impact of COVID still remains the major challenge for businesses. Of course, the impact of the pandemic has also had knock-on effects on the labor market, inflation and rising energy prices,” Hughe said. “With the northern hemisphere moving into winter soon, pushing up energy use, and little sign of any end to the conflict in Ukraine, energy costs could soon become an even more major concern, particularly for European businesses. Despite some positive signs that inflation in the U.S. may be levelling off, businesses should make use of all available support and plan carefully in order to tackle these challenges and deliver on their optimistic predictions for 2023.”