South Yorkshire Chambers Urge Government To Act on Cost-of-Doing Business Crisis
In a joint statement by the CEOs of Doncaster, Sheffield and Barnsley & Rotherham Chambers of Commerce, they said:
"It’s a testament to the strength of our businesses in South Yorkshire that, despite the tough backdrop, many remain optimistic about their prospects for growth. Investment plans are holding firm. Growth in sales from UK customers remains strong, if a little slower than the previous quarter. This mirrors the national picture with business sales, cash flow and investment all close to UK averages.
"Yet the major story is the relentless rise in the cost of doing business. The majority of businesses responding to our landmark survey, the QES, expect prices to rise in the next three months. Six in ten cited inflation as a major concern compared to four in ten just last quarter.
"The ongoing rise in prices for raw materials and fuel explains some of this sentiment. But a hike in national insurance payments and the change to the energy bill cap were also on the horizon. We saw some positive moves to address rising costs in the Spring Statement like the cut in fuel duty that will support our logistics sector. But it’s not too late to move further - introducing an energy cap for small businesses would broaden the range of companies receiving support.
"Our survey shows that cost pressures can encourage some businesses to innovate. But the bigger driver of innovation – which underpins the long-term health of our economy – are the changes businesses make to serve more customers and bigger markets. On this, government can make a big, positive step by awarding Doncaster as the home of the new Great British Railways HQ. South Yorkshire’s rail and logistics cluster has huge growth potential for our region and the UK. GBR would open up many new opportunities for business investment and industry collaboration."
Highlights from the South Yorkshire Quarterly Economic Survey:
- The share of firms reporting growth in domestic fell from 46% to 38% but the greater number 47% saw no change. The share of firms reporting a decline in exports exceeded those reporting growth for the first time since Q1 2021.
- South Yorkshire businesses continue to report a tight labour market. Businesses indicate strong intentions to hire but most who try experience recruitment difficulties (93%).
- Pressure on finances are strongly evident: 21% of businesses report worsening cashflow this quarter, compared to 19% over the last three quarters. 61% of businesses expect prices to increase in the next three months, the highest proportion since the beginning of 2020.
- Four out of five South Yorkshire businesses spent less than 10% of turnover on innovation costs in the last 12 months. Around 75% of South Yorkshire businesses predict that they will spend less than 10% of turnover on innovation in the next 12 months.
QES survey results were drawn from 267 responses collected over 13 February to 11 March 2022.