The economic super-computer...

There’s certainly been no shortage of ‘big’ economic news in recent weeks. We’ve had the Government’s eagerly-awaited spending review, a reset of our trading relationship with the European Union, and a real mixed bag of trade statistics.

But when you feed it all into the economic supercomputer, how does it all trickle down to the day-to-day operations and balance sheets of Shropshire businesses?

Let’s take the new EU deal first. The UK has reached a new agreement with the European Union, setting out post-Brexit relations on areas including fishing rights, trade and defence.

Although some of the small print still has to be agreed and paperwork signed, it marks the biggest reboot since the UK officially left the EU five years ago.

Michael Harte, managing director of Bridge Cheese in Telford, gave his thoughts on the EU reset when he met with Telford MP Shaun Davies for what he described as an ‘open and honest’ debate.

He said: “As a small to medium-sized business in the food industry, we were absolutely delighted to hear the news around the reset agreement with the EU. We are now looking to the future with renewed confidence and optimism.

“Our aim from this will be to increase our turnover. From a standing start, we would hope that a good 10% of our volume will be supplying into the EU market in the next two to three years.”

He said this had the potential to create up to 12 more full-time jobs. “The EU will become an important part of our business here at Stafford Park.”

Shaun added: “Bridge Cheese is such a great example of a local business with a global footprint, and it’s so important that we give them the support they need to continue their growth and boost our local economy.”

Shropshire Business polled business owners on social media to collect other views on the EU reset – and it revealed a mixed picture.

Jude Robinson, joint owner of GWR Fasteners in Oswestry who also now runs a farm shop, said: “Even if you only read posts from employers on LinkedIn, you will understand the struggle of hiked taxation on businesses, the downturn of growth (investment in capital and people), and witness entrepreneurs escaping to foreign lands.

“What will deals with the EU matter if there’s no businesses to contract with?”

The Government’s financial squeeze on employers is certainly taking its toll on the Shropshire business community and creating an atmosphere of nervousness and uncertainty, according to the results of the latest Shropshire Chamber of Commerce’s latest quarterly economic survey.

It quizzed business owners on a wide range of topics including sales, recruitment, training, cashflow, and confidence levels, and found that the rise in employer National Insurance and the National Living Wage was pushing wages up, and provoking some bosses to reduce head counts.

It is also prompting companies to raise their prices to offset the costs, while the added costs are said to be putting the brakes on recruitment.

The survey was carried out over a three-week period in May, shortly after the increased employer National Insurance and National Minimum Wage rules had come into effect – and when Donald Trump was unveiling his first wave of tariffs.

Rosie Beswick, Shropshire Chamber’s policy analyst, said: “When we asked employers to tell us their greatest ‘fear factors’, there was a general frustration that policy decisions outside their control were sapping confidence.

“Some sectors reported an increase in bad debts, and a growing battle to get bills paid on time – and the extra costs being shouldered by businesses appears to be reducing the prospect of making big-ticket investments.”

Only one in three of the Shropshire businesses that took part in the survey reported a rise in sales over the past quarter – with fewer than one in five seeing a rise in future orders.

The number of companies predicting job losses increased by 2% on the previous quarter, and firms also reported a significant gap in the salary and benefit expectations of prospective staff, against the packages they could afford to offer.

Just over 25% of employers are expecting a rise in turnover and profits over the coming months – broadly unchanged on the previous quarter.

The survey also showed that nearly 40% of Shropshire employers were seeing a rise in bad debts and a worsening of credit terms, and three quarters claim Rachel Reeves’ first Budget has had a negative effect on their businesses.

There were some indicators heading in the right direction, however. The number of Shropshire companies looking to invest in training rose by 7% on the previous quarter.

While the EU reset has met with a mixed response, the UK’s deal with Donald Trump to end potentially devastating tariffs on our steel exports has left manufacturers breathing a sigh of relief.

They include Gerhard Trilling, general manager of Bridgnorth Aluminium, the only aluminium rolling mill producing coils and sheets in the UK.

He said: “Bridgnorth Aluminium has been one of the loudest voices championing the need to secure a trade deal with the United States, so we naturally welcome news of a 0% tariff agreement on aluminium.

“This is a significant achievement for our Government, but more importantly for UK manufacturing and our ability to compete globally.

“This will give us much-needed certainty and will allow us to accelerate our investment in new technology at our Bridgnorth facility, driving our desire to be a sustainable manufacturer and a key player in the circular economy.

“This agreement will unlock new market opportunities, attract increased investment, and accelerate innovation throughout the supply chain.

“It will also undoubtedly safeguard high value jobs and, crucially, will give us the platform to create new employment locally with a strong determination to grow the aluminium specialists of the future.”

Economic figures are painting a mixed picture right now. GDP data published in June showed the UK’s economy shrank by 0.3% in April, although overall it has grown 0.7% in the past three months.

It suggests that we are turning more squarely into some significant headwinds. 

And analysts warn that this continued uncertainty will inevitably hamper firms’ investment decisions and long-term growth prospects – hitting investment, recruitment and prices.