The Government’s financial squeeze on employers is taking its toll on the Shropshire business community, creating an atmosphere of nervousness and uncertainty, it has been revealed.
Shropshire Chamber of Commerce today revealed the findings of its latest quarterly economic survey which quizzed business owners on a wide range of topics including sales, recruitment, training, cashflow, and confidence levels.
It found that the rise in employer National Insurance and the National Living Wage, which was introduced in April, was pushing wages up, and provoking some bosses to reduce their head counts.
It is also prompting companies to raise their prices to offset the costs. The added costs are also putting the brakes on recruitment, the survey found.
The quarterly 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 which 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 the right direction, however. The number of Shropshire companies looking to invest in training rose by 7% on the previous quarter.
Shropshire Chamber of Commerce’s quarterly economic survey is open to any business of any size in Shropshire or Telford & Wrekin. Companies do not need to be a member of Shropshire Chamber to take part.
Shropshire’s results are fed into the national survey by the British Chambers of Commerce, which is used by the Bank of England and other relevant bodies and economists to gain an understanding of the state of business.
Ruth Ross, Shropshire Chamber chief executive, said: “These are clearly times of great uncertainty for many of the county’s businesses.
“The findings of our survey are broadly in line with the national picture, with the British Chambers of Commerce's own quarterly economic forecast saying the UK economy will remain sluggish.
“Hopefully the recent trade talks aimed at averting some US tariffs and easing EU trade frictions could support exports and imports this year.
“But the scale and timing of any economic gains remain uncertain at a time when businesses are craving clarity and stability.”
Pictured: Shropshire Chamber chief executive Ruth Ross
