Business confidence is down for a second quarter in a row, according to the results of Staffordshire Chambers’ latest Quarterly Economic Survey (QES).
Throughout 2024, past QES results picked up that investment had been paused, in anticipation of a General Election and then the Budget.
Some of the financial pain from Budget announcements – such as the increases in employer National Insurance Contributions and rise in the Minimum Living Wage – has been shown through some of the QES responses in the fourth quarter of the year.
When asked to describe the impact of the latest Budget on future investment and growth aspirations in their business, 49.5 per cent of respondents chose ‘negative’ with a further 19.4 per cent unsure, while 29.1 per cent chose ‘neutral’. Only 1.9 per cent selected ‘positive’.
Similar results were returned for a question asking the impact of the Budget on future recruitment plans – 45.6 per cent said ‘negative’, 22.3 per cent were unsure, 31.1 per cent said ‘neutral’ and one per cent chose ‘positive’.
Results from the survey also show:
- A drop in respondents expecting a growth in turnover and profitability in the coming months.
- A significant rise in the number of businesses anticipating the need to increase prices.
- A drop in the numbers who have invested in plant, machinery and capital over the past three months.
- A fall in the number of businesses who tried to recruit staff in the last three months.
- A significant drop in the numbers expecting to grow their workforce, but a rise in the numbers of respondents where it will remain constant.
- Another significant drop, this time in the number of businesses reporting an increase in cashflow over the past three months and those who report that it has remained constant.
On a positive note, there was a rise in number of businesses with an increase in advanced orders.
There was a slight drop in the number of firms reporting an increase in sales in past three months and a rise in number of businesses who responded sales ‘remained constant’ during that time.
And while there was a growth in the numbers of respondents who suggest they have increased their workforce, there was a rise in the numbers reporting a drop in workforce.
Declan Riddell, Policy Adviser at Staffordshire Chambers of Commerce, said: “Our latest QES results have linked to some of the discussions we’re having with businesses, who have shared concerns about some of the October Budget announcements.
“The increases in employer National Insurance Contributions and rise in the Minimum Living Wage are indicators of how the actual cost of doing business continues to spiral.
“These latest QES results also suggest that businesses may respond by increasing prices and extend a pause in investment.”
Declan added: “Thanks to all who took the time to complete our QES. It provides us with a really useful measure of business confidence and outlook.”
