A growing number of Shropshire businesses are looking to restructure their teams or switch to short-time working due to falling sales, it has been revealed.
Employers are also becoming increasingly concerned at a lack of ‘soft skills’ among the new generation of workers, including communication, teamwork, work ethic and professionalism.
These are some of the headline findings from the latest quarterly economic survey carried out by Shropshire Chamber of Commerce.
The report, which covers final three months of this year, looks at a range of areas including cashflow, profitability, investment, training, skills and recruitment, international trade, and ‘fear factors’.
It reveals a 10% increase in the number of employers reporting reduced staff numbers, compared with the previous three months.
And although only one in five Shropshire companies are looking to cut staff in the first quarter of 2024 – lower than many other parts of the UK - the figure was still 16% higher than the previous quarter.
Ruth Ross, Shropshire Chamber’s chief executive, said: “It is clear from the results of this latest survey that inflation, fuel costs and the heavy pressure from ever-increasing wage demands have started to take their toll.
“Stock piles remaining from Covid and supply chain issues easing are making buyers slower to place orders, or only placing smaller orders. Cash flow will be king at this point.
“Brexit is still making European trade difficult at a time when expanding the customer base may be a partial solution to sluggish sales and lay-offs.”
More than a third of companies said bad debts were increasing, and a similar number said they were having to offer higher wages to attract new staff.
A total of 41% of companies which trade internationally reported a drop in export sales over the past quarter – the same level as the previous three-month period.
When it comes to the greatest ‘fear factors’ among Shropshire businesses, 72% cited labour costs, while the number of businesses concerned about growing competition was up by 8%.
One company in the professional services sector told the survey: “Given the higher cost of living, people are staying in roles they don’t like for personal financial security. This is why we need to develop better leaders and managers.”
An employer from the retail and wholesale sector said: “We cannot invest in training due to low sales, and cashflow is at the worst I have ever seen it.”
Another from the manufacturing sector said: “There is no money to invest; it is more about survival at this time.”
And a hospitality boss said: “We are still carrying large amounts of debt from the lockdown period, such as backdated tax, and higher finance costs.”
Ruth said: “Although we have seen a slight reduction in local businesses attempting to recruit, the numbers are still substantial, and difficulties in finding the right candidates remain.”
The survey is fed into the British Chambers of Commerce database and also used by the Government and Bank of England to shape economic policy.
It has been charting economic trends across Shropshire since 2009, and is open to businesses of all sizes in Shropshire and Telford & Wrekin – not just Chamber members.
Ruth added: “We encourage all companies to feed into this survey, because the greater the business voice, the more valuable the information becomes.
“The data is used both locally and nationally to lobby those in power on main topics of concern in our county.”