Taxation main concern for UK bizs: BCC Q3 2024 economic survey

Concern about other external issues continues to ease. Concern about inflation and interest rates continues to slowly decline. Forty-six per cent of firms (compared with 49 per cent in Q2) said they are more worried about inflation compared to last quarter.

Concern about interest rates continues to fall, down to 29 per cent of businesses (34 per cent in Q2). 

Thirty-five per cent of firms (compared with 38 per cent in Q2) said they had seen an increase in domestic sales over the previous three months, while 43 per cent reported no change, and 21 per cent a decrease.

The production and manufacturing sector reported the toughest conditions, with 27 per cent of firms witnessing a decline in sales. 

The survey, conducted after the general election covering over 5,100 businesses, 91 per cent of which were small and medium enterprises, showed that most firms are still not raising investment. 

Fifty-six per cent of the companies expect to see their turnover increase over the next 12 months—a slight decrease from 58 per cent in Q2. Twenty-nine per cent expect no change and 15 per cent expect to see turnover decline.

Profitability confidence has also fallen, with 48 per cent of businesses expecting profits to increase in the next year. That compares to 51 per cent in Q2. Thirty-two per cent expect no change and 20 per cent of respondents believe their profits will fall (compared with 17 per cent in Q2).

Only 23 per cent of responding businesses said they increased investment levels (new plant, machinery or equipment bought or rented) over the last three months. That’s down from 25 per cent of firms in Q2. Fifty-nine per cent say investment has remained the same, 18 per cent reported a decrease.

Considerable sectoral disparities exist, with retailers least likely to report increased investment (21 per cent). While 30 per cent of production and manufacturing firms say they have increased investment over the last three months. 

The proportion of firms expecting to raise prices remains the same as last quarter at 39 per cent, after a rise earlier in the year. Fifty-eight per cent of businesses said they expect prices to stay the same, and just 3 per cent are expecting a decrease. 

Labour costs continue to be cited as the main pressure for businesses, cited by 66 per cent (67 per cent in Q2). The issue is more significant for transport, logistics or storage, with 76 per cent reporting it as a challenge.

Fibre2Fashion News Desk (DS)