• Swindon & Wiltshire Economy
• Tuesday March 26 2024
• Author Name: Peter Davison

Two thirds of West businesses confident about their own prospects, Chamber survey finds

A third of businesses in the West of England are optimistic about their own business prospects over the next three months – but less than a quarter are confident about the state of the UK economy at large.

Those are among the findings of the latest Quarterly Economic Survey conducted by Business West on behalf of the British Chambers of Commerce.

The optimistic sentiment is a vast improvement on the survey published in October, when just over half of West businesses were confident about their prospects.

Sixty-six per cent of businesses polled said they anticipated improvements in turnover and 44 per cent were looking forward to profitability gains in the coming period.

However, the survey found that West employers were still struggling to fill jobs. Forty-two per cent of businesses polled are hiring, and 63 per cent said they were struggling to attract the right candidates for jobs.

Other key findings included:

• Inflation Pressures: 35 per cent report rising prices, with labour costs (64 per cent), utilities (46 per cent), raw materials (35 per cent), and fuel (26 per cent) driving inflation.
• Price Rise Expectations: 38 per cent expect to further increase their prices during the next quarter, indicating continued economic pressure.
• Domestic Sales Boost: Significant uplift in domestic sales net balance to 18 per cent from seven per cent in Q4 2023, signalling market resilience.
• Export Challenges: Export sales dip to a -4 per cent net balance, marking a downturn from previous one per cent. Global trade remains tough.
• Cash Flow Concern: Cash flow net balance falls to -1 per cent, highlighting liquidity challenges for businesses.
• Investing in Growth: All investments categories measured expanded in Q1 2024 – investment plans for plant, machinery, and equipment showed a net balance of three per cent, matching the net balance for office and property space investments. More significantly, investment plans in training and research and development are up by eight per cent and six per cent, respectively.

‘Optimism is growing’

Matt Griffith, director of policy at Business West, said: “We’ve seen a trend develop over the past year where South West businesses are more confident in their own prospects, than the wider economy’s.

“It is encouraging to see so many companies are wanting to recruit. However, filling roles still remains a challenge. This is clearly an issue that needs to be tackled by whichever government that comes in.

“We are concerned to see a decline in export sales, with global trade remaining tough.

“On the whole, businesses are having to work harder to meet their goals, especially with the uncertainty in the national economy and the overall lack of confidence among consumers and investors. However optimism is growing and businesses appear to be feeling more upbeat as we move into spring.”

The survey is seen as a powerful tool for representing the voice of business to the government.

“And it is a leading indicator – often picking up big changes in the economy long before other surveys or official statistics.

The Bank of England’s Monetary Policy Committee uses the QES as one of its key benchmarks when setting interest rates.

HM Treasury and the independent Office for Budget Responsibility use the QES to put together their forecasts for the UK’s economic performance.

And the European Commission uses the QES to assess the health of the UK economy.