Fewer than 10% of South West firms have confidence in the UK economy, according to a new survey. Confidence in the nation’s economic prospects among businesses operating in the region has hit an “unprecedented low”, amid rocketing energy costs and inflationary pressures.
The survey of 400 companies was conducted by Bristol-based chamber Business West before the government’s “mini-Budget” in September.
While an Energy Bill Relief Scheme capping prices for firms between October and March has been announced, there was subsequent market turbulence after Chancellor Kwasi Kwarteng unveiled plans for the UK’s biggest tax cuts in half a century.
Business West said only 9% of respondents were optimistic heading into winter - down from 32% in the first quarter of 2021, during the national COVID-19 lockdown.
The chamber also found business concern about inflation had reached a new record high of almost 75%, with rising utility costs and fuel prices cited for increasing prices.
Over half of the businesses surveyed said they expected to raise their prices during the fourth quarter of the current financial year.
Andy Dodd, the owner of Flipside Bar in Bristol said his business was becoming “unviable” due to the rising operating costs.
Stuart Dennis, director of Wiltshire-based BK Grain Handling Engineers, said: “Continually rising prices means that we have to pass on costs to customers, often after projects have commenced. This in turn leads to a breakdown in customer relations, something that our company has relied upon for a long while.”
Recruitment struggles were also reported, with half of respondents saying they had tried to add staff in the previous quarter with most facing difficulties.
Almost two-thirds of employers added that wage inflation was weighing on their margins, as they felt the pressure to increase prices because of labour costs.
Rachel Butler, owner of The Hearty Hare Café in Chippenham, said: “Rent, business rates and staff costs are increasing. We can’t charge our customers £6 for a coffee. It has become a juggling act and cutbacks have been made as much as possible.”
Matt Griffith, director of policy at Business West, added: “The energy price intervention will have addressed some of our local firms’ most pressing concerns but worries about exchange rate volatility and broader UK economic health are growing, even before the full fallout from the market’s response to the government’s mini budget is felt.
“Our findings highlight the scale of the challenge in securing future business confidence over the coming year.”
Read next:
- Ashton Gate Sporting Quarter homes and arena plans approved
- Shares rise at Imperial Brands as cigarette maker announces £1bn buyback scheme
- Satellite launch from Spaceport Cornwall to take place 'soon', government confirms
- Rolls-Royce secures more UK innovation funding than any firm in 18 years, research finds
Like this story? Why not sign up to get the latest South West business news straight to your inbox.
