But despite the difficulties, a Business West quarterly survey in the South West has nevertheless found some strong resilience.
That’s good news for local companies with over half of the 300 firms who took part in our survey rating their current business resilience good or excellent.
While not a huge boost for business, this figure is still up by two
percentage points since our last quarterly survey.
Companies in our area say that confidence in the UK economy and the prospects for their own business are now higher than the last quarter. The biggest rise has been in renewed confidence in the national economy.
Not really surprising, of course, after the economy was brought to its knees at the end of last year.
That rise in confidence in the national economy has been dramatic-up to 20 per cent from an all time low of six per cent in quarter 4 of 2022 when the markets reacted
sharply to the ill-fated government economic plans.
So, as a result, our survey found that the proportion of business expressing confidence about their prospects is now up to 52 per cent-from 46 per cent. However, while inflation may have peaked,45 per cent of the companies that replied to us said they were expecting to increase their prices in the next three months.
In fact,68 per cent of the companies surveyed said they were under pressure to increase their prices due to rising labour costs.
These costs included meeting competitive market salaries to attract new staff and retain their existing workforce.
Here in Gloucestershire we have a labour situation where there are now something over 20 000 job vacancies posted.
But there is a dire shortage of skilled workers looking for jobs.
This is the big question? How many of these skilled workers have decided on early retirement following Covid?
We simply do not yet know the answers to this question.
And in the meantime, the tight labour market is hindering the growth of companies.