North East businesses are becoming increasingly worried about a range of challenges facing them in 2023, a survey of companies in the region reveals.
The quarterly economic survey from the North East England Chamber of Commerce shows energy costs and inflation remain the two biggest concerns for local businesses, but there are also worries over staff costs, taxation, shortages of workers and interest rates.
There are some signs of improving conditions for businesses, with increasing investment in plant and training plans, as well as better figures on exports. But UK sales and orders have both dropped significantly over the last year and the Chamber highlighted a general lack of business confidence.
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Chamber president Andrew Haigh, who is chief executive of Newcastle Building Society, said: “The overall outlook continues to be one of concern, but this quarter’s results do suggest that while inflationary pressures remain, some of the more extreme impacts are continuing to ease. These points of optimism are vital for businesses in our region, as the general decline across indicators of future activity and performance reflect how concerned organisations are about 2023.
“Inflation, energy prices and staff costs all continue to trouble more businesses. However, the extreme increases that we have seen in these indicators through previous quarters has tapered off. Interest rates and taxation have grown significantly as categories of concern for all businesses. It will be important to monitor how businesses respond to these evolving challenges through 2023.” The survey also revealed that 82.2% of businesses questioned said they had taken action to try to reduce expenditure on their energy bills. While short-term adaptation strategies are still common, many businesses are attempting to respond to high energy costs with longer term strategies for energy efficiency, the Chamber said.
The Chamber’s findings have been released ahead of a crucial week of data that will show the health of the regional and national economy.
Next Tuesday will see the release of regional unemployment figures. Last month the North East joblessness rate rose after two months of record lows as concerns grow that the economy is heading into a recession.
Next week will also see figures released on the latest rate of inflation.
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