Business West’s latest Quarterly Economic Survey reveals significant recruitment difficulties for businesses across the South West. 69% of businesses face challenges in hiring, particularly for skilled manual, technical, and professional managerial roles. Despite these challenges, 79% of respondents are looking to recruit for full-time positions, and 49% are seeking to fill permanent roles.
General economic conditions and business uncertainty remain the top concerns, with 62% and 51% of businesses respectively highlighting these issues. While concerns about inflation have eased slightly, it remains a significant problem for a quarter of respondents. Political events, including elections and changes in government policies, are major concerns affecting business confidence and planning.
Matt Griffith, Director of Policy at Business West, commented, “These findings underscore the ongoing recruitment challenges and capacity issues faced by businesses. Addressing these concerns is crucial for enhancing productivity and growth in the region. Further focus on skills development and workforce planning could be instrumental in mitigating these challenges.”
The survey results also show that the business landscape is navigating economic challenges with moderate optimism in specific areas.
There is a slight improvement in confidence regarding the UK economy, although significant uncertainties and pressures persist.
Recruitment difficulties across South West
The outcome of upcoming elections, according to Griffith, could bring some certainty and help businesses plan with a clearer economic strategy for the next five years.
Domestic sales remained positive in Q2 with a net balance of 5%, reflecting resilience amid broader economic challenges. Manufacturers reported stronger performance compared to businesses in the service sector. The net balance for export sales stood at 1%, with manufacturers showing a stronger performance at 16%, while the service sector continues to face challenges at -8%.
The Q2 results also indicate a trend towards price stability, with 61% of businesses reporting constant prices over the past three months. Additionally, 35% of participants increased their prices, while 5% reduced them. Other key findings include:
– Modest improvement in UK economic confidence, with a net balance of -21% (compared to -26% in Q1).
– Profitability forecasts are moderately optimistic, with 46% expecting improvement, though they lag behind turnover expectations, which stand at 52%. – Labour costs are a significant concern for 66% of businesses, followed by utilities (46%), raw materials (38%), and fuel (29%). In summary, while businesses in the South West face substantial recruitment and economic challenges, there is cautious optimism and resilience in certain areas, highlighting the need for continued focus on economic stability and workforce development.
