Business confidence high despite tough trading conditions

The latest Quarterly Business Report from the WCNW Chamber of Commerce, published in partnership with Chester West & Chester Council, reveals that while there are some positives to take from this quarters responses, three years of economic shocks, higher inflation and interest rates, skills shortages and geopolitical tensions, continue to impact business confidence and output. Consequently, most SMEs report no increase in their investment plans.

For Q3’23, the Chamber Quarterly Business Report received 66 responses from businesses in West Cheshire and North Wales representing over 6750 employees. 14% of the businesses that responded were from the manufacturing sector whilst the remaining 86% came from the services sector. The fieldwork for this survey took place between 21st August and 11th September 2023.

Key Findings

• Business Confidence in turnover growth rose to the highest level on record.

• Improvement in confidence has yet to translate into a notable rise in investment plans for training and plant/machinery.

• Export Sales increased to the second highest point since the first quarter of 2019.

• Recruitment difficulties fell to a two-year low showing signs that the labour market is continuing to ease.

• Despite a fall over the last three quarters, inflation remains the key concern for businesses and has been the top reported concern for the last seven quarters.

• Labour costs continued to be the biggest pressure on prices.

Debbie Bryce, Chief Executive Officer of West Cheshire & North Wales Chamber of Commerce, commented:

“This quarter’s results show some positive signs for the region with business confidence in turnover rising to a record high. Despite this, confidence has yet to feed through to business investment, which is put down mainly to fears of interest rates climbing further.

“While the recovery in business confidence provides a brighter spot, this needs to be reinforced with a clear plan from Government on long-term investment and direction from the Bank of England on the future path of interest rates.

“The results of the QBR also point to tough trading conditions for many firms as inflation, labour shortages, global trade barriers, and interest rate rises continue to bite.

“After the disappointment of HS2, firms want to see clear signals from Government to encourage investment. This means putting in place a five-year rolling guarantee on the full expensing tax allowance to give business some much needed certainty.”