The latest QES results show a significant decline in key economic indicators, with firms citing weakening structural business conditions and confidence as huge causes for concern.
This comes as little surprise in light of events during recent weeks and months, but it paints a real picture for the business community – that firms here in Staffordshire and across the country are caught in the pincer movement of soaring inflation and rising interest rates.
Key findings from the survey include:
- Four in ten businesses believe their profitability will reduce over the next 12 months
- Fewer businesses are reporting increased sales; only 33% of firms reported increased domestic sales, down from 41% last quarter.
- Measures for inflation remain at record highs as 84% of firms say it is a growing concern for them
There has been a sector-wide fall in domestic sales that, coupled with rising inflation, is making for a toxic mix – and businesses must be supported.
Both measures are heading towards levels not seen since the onset of the Covid crisis.
While the energy support packages have alleviated some immediate pressure on firms, confidence has taken a further hit following the market reaction to the mini-budget. The devaluation of the pound has also added a huge cost base for businesses reliant on imports.
Businesses now desperately need to see economic stability in order to rebuild the confidence to invest.
More than ever, it is vital that the Government roll out a long-term plan to support firms of all sizes – and time is certainly of the essence. The Chamber network is making a plea to Government to provide more certainty by bringing forward the publication of their Fiscal Plan. The sooner they do this, the sooner markets and businesses will understand what the long journey to stability looks like.
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