Costs still outpacing turnover for ‘worried’ Shropshire businesses
Costs are still outpacing turnover growth for Shropshire businesses, prompting many employers to shed staff or scale back on recruitment.
This was one of the headline findings from the latest quarterly economic survey carried out by Shropshire Chamber of Commerce.
The survey – which feeds results into national policy-makers – collected the majority of its feedback immediately before Chancellor Rachel Reeves’ latest budget.
Many businesses said they were still feeling the effects of her 2024 announcements, which piled on extra staffing costs – and said wage demands were showing no sign of easing.
One employer from the manufacturing sector said: “Business owners are workers too, and probably work more hours for a lower hourly rate than most. I may consider selling up or moving the company abroad.”
Another from the retail and wholesale sector said: “In the last two months two of our staff have resigned. We are looking to reduce further and may have to consider compulsory redundancy.”
And a logistics company boss said: “We tried to take on an apprentice, but this was challenging due to the lack of productivity and the minimum wage we had to pay.”
Speculation and uncertainty in the run-up to this year’s budget was cited by several employers as having damaged confidence, making customers more wary of spending and reluctant to plan too far into the future.
Only a quarter of companies which took part in the latest survey said they had seen a rise in sales over the past quarter, and more than 80% said future order levels had fallen.
Fewer than 10% of employers said they expected to increase staff numbers in coming months – one of the lowest levels since the Shropshire Chamber surveys began.
When questioned about ‘fear factors’ impacting their day-to-day operations, there was a 13% rise in those who quoted taxation, and an 11% jump in those who pointed to inflation.
Only 39% of Shropshire businesses think their turnover will improve over the next year – although this is still lower than pre-Covid levels.
Shropshire Chamber of Commerce’s Quarterly Economic Survey is open to any business of any size in Shropshire or Telford & Wrekin.
Companies do not need to be a member of Shropshire Chamber to take part, and feedback is left anonymously to allow companies to speak frankly and honestly.
Shropshire’s results 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 to gain an understanding of the state of business.
Rosie Beswick, Shropshire Chamber’s policy analyst, said: “It is clear from these latest results that there remains a great deal of uncertainty and worry across many sectors of the county’s business community.
“Staffing costs remain a growing burden, and many employers are cutting back on recruitment. And many backdoor taxes are continuing to sneak in. Slow payments to businesses also appear to have become a growing issue.”
Shropshire Chamber of Commerce has won the contract to lead the Government’s Local Skills Improvement Plan research across the Marches area for another three years.
The project aims to empower local leaders, employers, colleges, independent training providers, and universities to transform skills training – driving national economic renewal from the ground up.
Rosie said: “Getting the right skills for our local employers is critical to ensure a healthy economic future for our region. Capturing the employer's voice locally is vital to ensure this can happen."
