Cost of doing business crisis escalates as heads of the British Chambers of Commerce and Scottish Chambers of Commerce chiefs are set to address Fife Chamber members this month
Nearly 2 in 3 (62%) firms expect to raise prices, a new historical high, while more than 3 in 4 (77%) cite inflation as a growing concern for their business, also an historical high. Indicators for cash flow are also weakening as the cost of doing business crisis escalates.
These are the stark headlines from the BCC’s Quarterly Economic Survey (QES) for Q1 2022 – the UK’s largest independent survey of business sentiment and a leading indicator of UK GDP growth – which shows inflationary pressures on firms reaching levels never previously recorded in its 33-year history.
The snapshot of over 5,600 firms also revealed a continuing stagnation in the proportion of firms reporting increased domestic sales and investment, while cashflow weakened slightly in Q1.
Commenting on the QES results, Alan Mitchell, Chief Executive of Fife Chamber of Commerce, said:
“These numbers should be an urgent wake up call for the UK and Scottish Governments to take decisive and speedy action to help the country’s increasingly stretched businesses, many of whom are yet to recover fully from the impact of Covid restrictions. The long-term survival of many businesses is at risk and the Spring Statement was a missed opportunity to ensure business have greater resilience to weather the uncertain and volatile times ahead.
The UK Government must provide urgent financial support, through the expansion of the energy bills rebate scheme, to include small firms and energy intensive businesses, and must introduce an SME energy price cap to protect smaller firms from some of the price increases. The Treasury must rethink the damaging Employer National Insurance increase. A failure to act now will leave businesses with no option but to continue to raise prices - leading to more difficult months to come for both firms and households. The Scottish Government cannot sit idly by either. They have resources and finance they can deploy to help our wealth creators. Reducing the rates supplement paid by large manufacturers, who are generaly amongst the heaviest energy users, would be a good start.”
Click here for QES Q1 sectoral data.
Click here if you would like to participate in the Survey in future: your data makes a difference.
The Director General of the BCC and the Chief Executive of the SCC, whose organisations represent over 60000 businesses, are speaking at the Fife Chamber Public Policy Lunch on 21st April. Click here for information and booking instructions.