Business West survey finds over half of businesses materially impacted by economic and political uncertainty

More than half of South West businesses have reported that political and economic instability has had a material impact on their business in the last quarter, according to the latest quarterly economic survey from Business West.

Over 350 businesses from across the South West took part in the survey, with over three quarters of companies reporting concern about the general economic conditions, while 63 per cent of businesses said general business uncertainty was a key concern.

These figures have jumped by over 20 percentage points since this time last year, during the depths of the pandemic.

The proportion of businesses concerned by taxation has risen to 38 per cent (from 22 per cent in Q3) – possibly linked to the new Chancellor’s Autumn Budget statement which took place halfway through the fieldwork period.

Within this Budget the tax burden was further increased on the back of large-scale U-turns immediately following the end of the Truss Government. The tax burden relative to the economy’s overall size has now reached a historic high.

Business confidence in the UK economy has also reached a new historic low, with only six per cent of companies feeling confident in the nation’s economic prospects.

Forty six per cent of businesses are confident about their own business prospects, a decrease of almost 20 per cent since this time last year.

The gap between confidence in their own business and that of the UK economy is the highest ever recorded.

UK sales and orders have both fallen further into negative territory in Q4, symptomatic of the impacts of the recession. The proportion reporting a decrease in domestic sales is now above 30 per cent, compared to 17 per cent this time last year.

Matt Griffith, director of policy at Business West, said: “2022 has been a very tough year for local businesses, with global inflation and economic headwinds compounded by a confidence sapping period of political uncertainty in the UK.

“The consequences of both are still being felt, both on business balance sheets and economic sentiment. We hope that 2023 holds more cheer, and it is a testament to business resilience that many still feel confident in their own business prospects.

"With luck the new year will bring a let up of pressures and we can start to report signs of green shoots in our future surveys.”