Herefordshire & Worcestershire Chamber of Commerce’s renowned Quarterly Economic Survey (QES) has revealed that local business is beginning to feel the pinch after the vote to leave the EU.
In Q4 2016, we saw 43% of businesses feeling pressure to raise prices, more than doubling since the vote. This is mostly attributed to the increasing costs of raw material prices, as well as volatile exchange rates. Cash flow is also becoming a substantial concern, in particular for a number of SME’s, with 20% of businesses reporting a worsening situation.
This quarter the biggest concerns for business are exchange rates (40%), closely followed by corporate taxation (37%) and competition (33%). Corporate taxation has risen significantly as a concern since summer 2016, this could be attributed to businesses being concerned about extra costs which could be inflicted on them over 2017, when they are beginning to feel the squeeze on a number of fronts.
However, while 2016 brought a number of challenges for the business community, the outlook for 2017 remains positive and businesses are set to start the year in solid health. 43% of businesses reported an increase in domestic sales over Q4 and a third of exporters reported an increase in sales abroad. The majority of companies also expect profitability and turnover to improve over the next 12 months, a more positive picture painted by businesses than the results we saw in the previous quarter.
To help combat the rising concerns of local businesses, we are launching the Chamber Business Manifesto 2017, which contains all of our priorities for local and national government, on the 3 February 2017 at Worcester, Bosch. The Chamber has put this together following consultation and feedback from over 600 local businesses. Join us at our launch event to find out more, email Sophia Haywood, Policy Executive on email@example.com
to book your FREE place.
Mike Ashton, Chief Executive of Herefordshire & Worcestershire Chamber of Commerce, said:
“This quarter, we are beginning to see the uncertainty around Brexit hit local business. The number of businesses expecting to raise prices has more than doubled and cash flow poses a real concern. However, businesses remain resilient and the outlook for the year remains positive, with the majority of business expecting turnover and profitability to improve. This will be my last comment on the QES before I retire in March – before I sign off, I’d like to wish businesses all across the two Counties a prosperous New Year.”
Click here to view the report