Shropshire businesses working in 'pressure cooker climate' due to tax fears says Chamber of Commerce

The chamber says the results of its latest quarterly survey paint a "subdued" business picture, with some firms reporting slowdowns or redundancies, adding that firms are working in a ‘pressure cooker' climate due to continued fears over taxation, inflation, staff costs and employment law changes.

Nearly two thirds of the companies which took part cited taxation fears ahead of the Government’s November budget, and half said they remained worried about inflation.

Fewer than a quarter of businesses are investing in training or spending on plant and machinery, and little more than a third of local employers say they are working at full capacity.

There was slightly brighter news on turnover and profitability confidence, however, with a 10 per cent jump in firms reporting a rise in turnover, and a 6per cent increase in those seeing an upturn in profits.

But the majority still say they are unable to raise prices sufficiently to cover growing running costs. More than half say they do expect to raise prices in the coming weeks – an 11 per cent increase on the previous quarter.  

Several businesses said they would have been looking to take on additional staff without the ‘massive additional strain’ created by the introduction of employer National Insurance.

 “Overall, the picture remains subdued with businesses reporting slowdowns or layoffs," said Rosie Beswick, Shropshire Chamber’s policy analyst.

“The report fieldwork was carried over three weeks in August and September when US tariffs and wage cost rises were in place - and this was coupled with a lot of worry about the potential of more tax increased ahead.

“However, the very moderate positive rises in certain areas does show that the impact of the introduction of the new wage costs has started to settle to a new, albeit rather depressed norm.”

The survey comes as new national figures show companies are wary of taking on staff in the current economic climate.

New statistics from the Government's Office for National Statistics showed that during the period between July to August, the number of vacancies in the economy was down by 119,000 on a year earlier.

Unemployment also rose to its highest level in four years.

However the Department for Work and Pensions (DWP) said since Labour came to power in July 2024, falling economic inactivity has driven the number of people employed and unemployed looking for work to a near record high of 34.243 million - adding that the number of people that have gained employment since the election (753,000) has outpaced the rise in unemployment (207,000).

The results from Shropshire are fed into the national survey by the British Chambers of Commerce, which is used by the Bank of England and other relevant bodies and economists to gain an understanding of the state of business.