Business confidence in Shropshire plummets amid Brexit uncertainty
Confidence among Shropshire businesses is at its lowest point since the height of the recession as uncertainty bites, a new survey has shown.
The latest Quarterly Economic Survey from Shropshire Chamber of Commerce shows that expectations among Shropshire businesses for growth in turnover and profitability plummeted in the third quart of the year.
The percentage of respondents to the survey who expect profits to rise over the next 12 months fell to about 34 per cent in the quarter – a figure last seen in 2009.
More now expect their profits to remain static, and the number expecting their performance to worsen was above the 20 per cent mark for the third time in a year – previously it had not happened since early 2013.
Similarly, sales confidence is dropping, with the proportion of businesses expecting turnover to grow dropping below 50 per cent for the first time since 2011, and those expecting it to fall hitting a five-year high.
Many businesses are seeing their margins squeezed by inflation, which spiked at three per cent in September after the decline in the value of the pound.
Chamber chief executive Richard Sheehan said: "While we wouldn't ring too many alarm bells based on one quarter, clearly whatever was happening in the world at the moment people filled this survey in was making them feel very uncomfortable.
"We are not suggesting we are heading into recession – it's that two measurements have fallen to a level that is not dissimilar to the time of the recession.
"We don't want to set any hares running, but if we have two or three consecutive reports that are around these figuresd we would be demonstrating more concern. Nonetheless, this sort of result is not good news."
The figures, compiled from surveys filled in between August and July, also suggest that investment plans are being put on ice.
More businesses said they were to rein in investment in both machinery and training than those who said they were ramping up spending. In the case of training investment, it is the first time since 2009 that there has been a negative balance.
It's not all doom and gloom – the number of businesses which are operating at full capacity rose to 37 per cent – an eight point increase on the previous quarter.
Recruitment fell slightly, but businesses expect to increase their intake of staff in the future – although with unemployment at historic low, the number of businesses experiencing difficulties in recruiting suitable staff continues to grow, putting further pressure on the Government to ensure there is a supply of staff from overseas.
Mr Sheehan said: "We need clear communication and clarity on the activities around Brexit.
"We understand why some people wouldn't want to reveal certain aspects of their negotiations, but also ministers need to understand that business needs continuity and a clear vision of what is going to happen in the future."
He added: "The majority of business discussions we have when engaging with businesses in Shropshire are extremely positive. Many businesses are doing very well. They have rolled their sleeves up and are making the most of what is available."