Resilient Thames Valley bucks national trend in British Chambers of Commerce economic survey

Resilient businesses in the Thames Valley have bucked the national trend, according to the results of the British Chambers of Commerce quarterly economic survey for Q2 2022.

The national picture showed only 43 per cent of the 5,700 businesses surveyed UK-wide predicting an increase in sales – down from 50 per cent in Q1 – and 43 per cent predicting an increase in profits, down from 50 per cent in Q1.

Meanwhile, regional figures produced by Thames Valley Chamber of Commerce showed 65 per cent of respondents predicting an increase in sales, while the number of businesses anticipating their profitability to improve stood at 57 per cent.

Predictably, inflation remained a worry for businesses both regionally and nationwide. Eighty-two per cent of businesses nationally and 81 per cent regionally cited inflation as their biggest concern.

The UK results showed 65 per cent of businesses expecting to raise their own prices in the next quarter – with the regional results broadly in line at 64 per cent.

But with 1.2 million fewer workers in the jobs market than before the pandemic, employers were still struggling to attract and retain employees.

Regionally 70 per cent of respondents said they'd experienced difficulties in recruiting staff.

The regional figures were released at an online seminar yesterday (Tuesday) hosted by Tim Major (pictured) senior account manager at Swindon Chamber of Commerce, part of Thames Valley Chamber of Commerce.

Adding some flesh to the statistical bones was Danny Dartnaill, a partner and insolvency practitioner at the Reading office of tax and advisory firm BDO.

Noting that corporate insolvencies were at historic lows, Danny posited that the UK economy had been propped up by "a huge amount of debt" in the form of government initiatives.

While those initiatives had had the desired effect, he said, the tide was turning and HMRC was starting to take "a more aggressive stance" with debtors.

Companies who could foresee temporary cash flow issues in their business should speak to their bank early, to ensure the best chance of ongoing support, he advised.

The webinar also heard from Uma Kambhampati, professor of economics at the University of Reading, who discussed the causes of the inflation that was hitting business costs while driving down custom as the cost of living crisis began to bite.

Uma said government and the Bank of England would need to address supply-side inflation – the cost of raw materials and utilities – to avoid stagflation: slow economic growth combined with high unemployment, probably resulting in a recession.

Tax relief, she suggested, should be targeted at lower-income families in an attempt to stimulate economic growth.