INSURANCE SECTOR UPDATE
The insurance sector has seen a significant increase in claims linked to climate and weather events over the past 12 months. Claims costs are also continuing to rise due to increased legal, repair and contractor costs. Cyber claim costs are increasing, with email compromise now one of the most common issues.
Global financial and regulatory pressures are also contributing to increased management and directors’ claims. Despite these pressures, the insurance market remains relatively competitive, with premiums generally stable or lower than two years ago.
There are concerns that Insurance Premium Tax could increase from its current standard rate of 12%, although no increase has currently been announced.
LOGISTICS SECTOR UPDATE
The logistics sector continues to face pressure from rising fuel costs, driver recruitment and congestion. Higher diesel prices are increasing operating costs for hauliers and making fuel surcharge mechanisms increasingly important.
Recruiting and retaining experienced HGV drivers remains challenging, with competition and wage expectations adding further cost pressure. Roadworks and congestion are also affecting timed deliveries, vehicle planning and drivers’ hours, with better coordination of roadworks and utility works seen as an opportunity to reduce disruption.
Overall, demand remains relatively steady, but operating margins continue to be under pressure.
TECHNOLOGY SECTOR UPDATE
The technology sector is seeing strong growth in the corporate market, particularly across managed IT and security services, where customers are increasingly prioritising service rather than price. However, some local MSPs are reporting flatter growth, particularly among smaller businesses where price remains a key consideration.
Demand for advice on the safe use of AI applications such as Microsoft Copilot and ChatGPT is increasing, with businesses becoming more aware of the risks associated with sharing company data with public AI services. Security consulting is also growing as businesses place greater emphasis on cyber resilience.
Demand for networking and Wi Fi deployments remains strong, supporting the continued return to the workplace. Recruitment is active, with growth creating opportunities for skilled staff and apprentices. Equipment supply remains a concern, particularly around memory and semiconductor availability.
EDUCATION SECTOR UPDATE
The University of Worcester has welcomed a new intake of students, following the graduation of around 1,800 students across eight ceremonies. Nationally, 446,690 applicants were accepted onto higher education courses in 2026.
International student recruitment in Worcester has seen a slight decline, reflecting wider sector trends, with international students continuing to study subjects including Nursing, Business and Education.
The University’s Help to Grow programme is preparing to launch its eighth cohort, with more than 150 businesses across Herefordshire and Worcestershire having previously benefited. Apprenticeship provision is also expanding through partnerships with local training providers.
The Lifelong Learning Entitlement is due to commence in January 2027, providing eligible learners with access to funding for approved courses and modules. The University has also recently awarded an Honorary Fellowship to Sharon Smith, CEO of Herefordshire and Worcestershire Chamber of Commerce, in recognition of her contribution to business and the wider community.
TOURISM SECTOR UPDATE
The first two major shows of the year, RHS Malvern Spring and Royal Three Counties, were both commercially successful, with excellent visitor numbers. The Autumn Show starts tomorrow (25th September), with early indications of another successful event, helped by fine weather.
Venue Hire has also had a strong year, although maintaining equine rings in competition condition has been challenging. An additional £15k has been spent on water this year, meaning some smaller equine events may not be viable in future summers if hot weather continues and costs are passed on.
Other challenges are mainly administrative, including updating policies for new employment legislation and meeting new document requirements for Venue Hirers under Martyn’s Law.
An updated Economic Impact Assessment for the Society and Showground will be available in October, quantifying our contribution to the local economy. Headline results will be shared in the next sector update.
AGRICULTURE SECTOR UPDATE
The mood between the new Government and farming industry appears to have improved. The NFU reports a more positive and constructive relationship with Defra and the Prime Minister.
There is also speculation that the Government may reconsider planned changes to Inheritance Tax, potentially by scrapping them or increasing the threshold from £2.5m to £5m.
Bluetongue: There have been 1,621 confirmed cases of BTV-3 in the UK during the 2026–27 season. Most are in Devon and Cornwall, with 3 cases in Worcestershire and 8 in Herefordshire. There have also been 70 cases in Staffordshire and 50 in Powys. Bluetongue is spread by biting midges.
CONSTRUCTION, ELECTRICAL AND RENEWABLES SECTOR UPDATE
Plug in solar is progressing, although businesses are highlighting the importance of checking existing electrical installations and fuse boards before systems are connected. The regulatory framework around plug in solar continues to develop, with safety requirements an important consideration.
Changes to regulations and increasing demand for EV and solar installations are creating a need for further staff training and CPD. The additional training requirements are viewed positively in terms of maintaining quality and safety, although they will create further costs and upskilling requirements for businesses.
There are also concerns about unqualified or poor quality work affecting the reputation of the wider industry, with stronger standards and enforcement seen as important.
ACCOUNTING SECTOR UPDATE
The upcoming Budget remains a key focus for businesses, particularly around taxation and the impact of recent tax changes. Businesses are also considering the implications of changes to Inheritance Tax and Business Relief when planning succession and the transfer of family businesses.
Research and Development activity is becoming more positive as businesses gain greater clarity around policy changes. The sector is continuing to engage businesses through tax update events and discussions around succession planning.
The recently released Make UK manufacturing survey is also providing a focus for discussions around succession, taxation and the future ownership of manufacturing businesses.
LAW SECTOR UPDATE
The legal sector remains relatively healthy, although clients are cautious ahead of the upcoming Budget, particularly those considering succession planning and restructuring. Corporate activity remains strong, including consolidation across manufacturing, accountancy, education, wealth management and insurance.
Property work also remains busy, with continued investment and development activity across the region. Employment law continues to generate demand, particularly around employment updates, restructuring and redundancy planning.
Workloads remain high and turnaround times are increasing. Regulatory changes are also creating additional reporting and compliance requirements for law firms. The safe use of AI is becoming an increasing concern, with firms placing greater emphasis on clear AI policies, appropriate oversight and the accuracy of AI generated legal work.