Shropshire businesses are nervous about what the Budget has in store
Shropshire businesses fear the new Government could be hitting them with tax rises in its first Budget later this month, denting their capacity for investment.
That is one of the headline findings in the latest quarterly economic survey carried out by Shropshire Chamber of Commerce.
The survey, which covers the third quarter of this year, quizzed business owners on a wide range of topics including sales forecasts, international trade, recruitment, training, cashflow, and confidence levels.
Businesses were surveyed over a three-week period during late August and early September.
Alex Brown, from Shropshire Chamber’s policy team, said: “Although promises have been made by the new Government not to raise VAT, National Insurance or income tax, many are worried they will be hit hard by other tax rises such as Capital Gains Tax.
“There is a concern that tax rises may lead to disinvestment, or low investment. Reduced investment will lead to a slower pace in the uptake of new technology and training, and will mean finance may become harder to acquire.”
The survey was open to any business of any size in Shropshire or Telford & Wrekin. Companies did not need to be a member of Shropshire Chamber to take part.
Overall, the number of Shropshire companies reporting a rise in turnover and profitability during the three-month period rose by 5% and 4% respectively, but the survey revealed some mixed messages on predicted business growth.
One professional services sector employer said it was expecting to see 25% growth in the next year, while a retailer said ‘the high seems to be well and truly over’ after a difficult year.
Overall, the number of Shropshire businesses reporting a rise in domestic sales was down by 8% on the previous three months, with those predicting future sales growth down by 14%.
More than one in three of the exporters who took part in the survey reported a drop in overseas sales in the past three months.
Late payers are also having a negative impact on some companies, particularly in the retail and manufacturing sector.
There was brighter news on the employment front, with a 6% rise in the number of firms who expanded their staff numbers during the third quarter – though concerns remain over recruitment.
A total of 83% of businesses said they were still experiencing difficulties finding the right candidates with the right skills, experience or work ethic.
The survey revealed a positive trend in investment across the Shropshire economy, with an 11% jump in the proportion of local firms spending on plant and machinery.
Around a third of companies said wage demands were easing with inflation now back under control, but more than a quarter said bad debts were on the rise.
Shropshire Chamber chief executive Ruth Ross said: “The results paint something of a mixed picture, and there is clearly a great deal of uncertainty about what the new Government’s budget has in store for us.
“For some businesses the change of Government is seen as a step forward to stability. For others it’s viewed as a worrying time with impending tax rises.”
The results of the Shropshire Chamber quarterly economic survey are fed into the national survey by the British Chambers of Commerce, which is used by the Bank of England and other relevant bodies and economists.
