Rising costs and access to labour top concerns for region’s businesses
Rising costs for energy, products and materials in the build-up to Christmas are the top concerns for North West businesses in the coming weeks.
According to accountancy and business advisory firm BDO’s bi-monthly Rethinking the Economy survey of 500 mid-market businesses, the rising cost of materials and products is causing the greatest concern for more than a quarter of businesses in the region.
The survey showed that 42% see access to labour as their biggest challenge in the final few weeks of the year, together with supply chain-related issues (39%). One in five North West businesses are most worried about the rising energy prices.
As businesses in the region face significant cost pressures and disruption to the delivery of products and services, many are taking proactive steps to address the latest challenges facing their business. According to the Rethinking the Economy survey, 42% of North West companies absorbing rising costs to keep prices the same – the highest rate of any other UK region – while a further 29% intend to reduce the number of goods and/or services they offer.
However, despite the challenges facing businesses in the final month of the year, 77% of North West businesses stated that they feel more optimistic about business prospects going into 2023, compared to this time last year, marking a shift in sentiment since COVID-19 restrictions were lifted.
Ed Dwan, partner and head of BDO in the North West, said: “Hearing businesses report that they are in a better place than this time last year is a positive but there’s no doubt that trading conditions remain extremely challenging for many North West businesses, following a period of sustained pressure over an extended period of time.”
The Rethinking the Economy survey showed that more than half of North West businesses have changed their approach to raising funding in the last three to six months due to the economic climate, with 44% admitting that they are delaying seeking funding as they are pausing expansion plans.
Dwan added: “With rising costs set to be an enduring theme throughout next year, North West businesses cannot do this alone and are calling for more targeted support to help secure the long-term future of mid-market businesses – the engine of the UK’s economy.”
According to the survey, nearly a quarter of regional businesses believe the Government should scrap plans to increase corporation tax for businesses in 2023, with a further 32% looking to the Government for new policy frameworks for recruitment and workforce upskilling. The aim of the frameworks is to tackle labour access issues, increase access to overseas workers, as well as help businesses access the skills they need.