The Herefordshire & Worcestershire Chamber of Commerce has released the results of the latest Quarterly Economic Survey in association with Bishop Fleming, outlining business performance between Monday 23 August to Monday 13 September. To read the full report, click here.
Businesses during the QES data collection period were asked about capital investment and their planning period. The graph shows out of 360 businesses, 159 advised they have no intention to acquire capital investment to support future growth. According to the Office for National Statistics, business investment grew by 2.4% in Q2, which is still 15.3% below the pre-coronavirus pandemic level in Q4 2019. (Business investment in the UK – Office for National Statistics, 2021). Despite business investment growing over the last quarter, businesses remain cautious and therefore are taking a long term approach to investing in training, machinery and equipment.
Investment plans for machinery and training has fallen from the previous quarter from 31% Quarter 2 2021 to 26% quarter 3 2021. Factors which have impacted investment by firms are the concerns around interest rates and the cost of borrowing to fund investment opportunities. Businesses are concerned if interest rates were to rise, this would then lead to less investment in machinery and training. Furthermore, local firms remain committed to invest more locally to help improve the local economy. However, 63% of businesses advised investment remains unchanged due to uncertainty around Brexit and Covid-19. The last 18 months have no doubt affected business confidence and evidence from the Chamber business intelligence surveys suggest firms do not want to commit to investment plans if there is another national lockdown, which would impact business confidence and slow down economic growth.
Attracting investment across Herefordshire and Worcestershire remains one of top priorities for Herefordshire and Worcestershire Chamber of Commerce. Investment in training and skills is pivotal in helping to secure long term investment across both regions and helping develop the local economy. There are currently a number of investment opportunities for SME’s and large businesses to invest in key sites such as Malvern Hills Science Park, Worcester six and Shell store in Herefordshire. 11% of firms have advised they have revised their investment plans down this quarter due to challenges around cash flow, this remains the lowest in the last 18 months.
This is clear evidence the many firms across Herefordshire and Worcestershire are still facing many challenges with future investment opportunities. The Chamber remains committed to helping businesses invest locally and help the local economy thrive and create opportunities for future growth.