Pressure cooker climate for businesses

New research reveals Shropshire businesses are working in a ‘pressure cooker climate’ with continued fears over taxation, inflation, staff costs and employment law changes.

The results of the latest quarterly economic survey by Shropshire Chamber of Commerce paint a subdued business picture, with some firms reporting slowdowns or redundancies.

Nearly two thirds of the companies which took part cited taxation as a ‘fear factor’ ahead of the Government’s November budget, and half said they remained worried about inflation.

Fewer than a quarter of businesses are investing in training or spending on plant and machinery, and little more than a third of local employers say they are working at full capacity.

There was slightly brighter news on turnover and profitability confidence, however, with a 10% jump in firms reporting a rise in turnover, and 6% increase in those seeing an upturn in profits.

But the majority still say they are unable to raise prices sufficiently to cover growing running costs. More than half say they do expect to raise prices in the coming weeks – an 11% increase on the previous quarter. 

Several businesses said they would have been looking to take on additional staff without the ‘massive additional strain’ created by the introduction of employer National Insurance.

One company in the professional services sector said: “Our order book is down. Customers are not spending their cash due to the current business climate.”

A manufacturing company said domestic orders were down by as much as 20%, while a transport business said its sales were ‘significantly down’ on two years ago.

And a local recruitment agency said: “We are seeing a distinct lack of job flow, and it’s apparent that there are more redundancies and restructuring activities happening across the Midlands.”

Rosie Beswick, Shropshire Chamber’s policy analyst, said: “Overall, the picture remains subdued with businesses reporting slowdowns or layoffs.

“The report fieldwork was carried over three weeks in August and September when US tariffs and wage cost rises were in place - and this was coupled with a lot of worry about the potential of more tax increases ahead.

“However, the very moderate positive rises in certain areas does show that the impact of the introduction of the new wage costs has started to settle to a new, albeit rather depressed norm.”

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.