Survey shows businesses are in for a bumpy ride in 2023
Businesses across the county will be starting the new year under ‘immense pressure’, according to the results of Shropshire Chamber of Commerce’s latest quarterly survey. The survey quizzed employers on a range of key issues including cashflow, sales, skills, training, recruitment, investment, and business confidence.
Alex Brown, Shropshire Chamber’s policy and projects officer, said: “The results show that 2023 is going to offer a bumpy ride for business. Cold winds from the east, coupled with staff shortages, wage inflation and increased taxes are putting immense pressure on businesses. The unknown future of fuel costs also weighs heavy.”
He added: “The Chancellor’s autumn statement did little to comfort business, with no clear future support on fuel prices, and the increased burden of taxes. Staffing issues still dominate, with employers struggling to find staff – and when they do, many turn out to lack competency, despite their qualifications. In addition to this, investment in plant and machinery has decreased as businesses raid that pot to bolster cashflow.”
The survey, carried out during November, found that the number of companies reporting an increase in domestic sales was 36%, a rise of 12% on the previous quarter. But one company from the retail and wholesale sector said: “We have grave concerns about the next six months,”
One in five businesses said their staff numbers had increased during the quarter, but many commented on the continuing struggle to attract suitably qualified staff. More than 80% said they were now having to offer higher wages in an attempt to fill vacancies.
One manufacturing firm said it had ‘struggled to recruit for all levels’, while a service sector business reported ‘a lack of responses to adverts – and CVs received with no relevant experience at all’.
Fewer than 10% of businesses which responded to the survey said they were investing in new plant and machinery, although the amount investing in training rose to one in three – possibly driven by skills shortages, the Chamber said. Many businesses say they are expecting to see profits dented in the coming year, with relatively stable turnover against a sharp rise in operating costs. Nearly half said they felt Brexit had negatively impacted their business, around a third said bad debts were increasing, and 40% said their suppliers were seeking to renegotiate terms and conditions. More than 20% said credit terms had got worse.
When it came to the biggest ‘fear factors’ for the future, inflation still remains the number one for Shropshire businesses – but taxation is narrowing the gap in second place.
One professional services company said: “When corporation tax was to be reduced there seemed to be a reward for all the hard work to keep the business alive and people employed through Covid and beyond. Now, with dividend tax to reduce and no increase in personal allowances, it is completely demotivating.”
Shropshire Chamber’s quarterly economic survey results are fed directly into the British Chambers of Commerce’s national database, which is the largest and most respected survey of its type in the UK. The BCC data is used by central government and the Bank of England to help understand business pressures and needs.
Ruth Ross, Shropshire Chamber’s deputy chief executive, said: “This survey clearly makes for difficult reading, but it provides us with vital intelligence on the current health of the Shropshire economy. It’s really important for us that as many businesses as possible take time to fill in this survey, so that we can help to raise the issues that matter with decision-makers. The survey is completely anonymous – so that you can speak freely - and takes only a few minutes. Every single business voice matters. The greater the voice, the greater the influence we can have to support the businesses of Shropshire, joining the national voice for business, and lobbying for change and understanding."
To find out more about the Chamber’s policy work, see https://www.shropshire-chamber.co.uk/policy-representation/