Strong business resilience offset by struggles to find staff, reveals Business West survey

More than half of South West businesses report either good or excellent business resilience, but the majority are facing difficulties in the hunt for suitable staff, according to Business West’s latest survey for Q1 2023.

The story matches recent figures from the ONS, which showed that there are currently more than 1.2 million job vacancies across the UK.

Business West once again reached out to over 300 businesses in the region and observed a generally brighter outlook from respondents.

20 per cent reported confidence in the national economy this time around, up from a record low of 6 per cent in Q4 2022. Meanwhile, 52 per cent of businesses were confident about their own prospects, a small increase from the previous 46 per cent.

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While inflation may have peaked, 54 per cent of respondents still reported intentions to increase their prices over the coming three months. A large majority of this group cited pressure from labour costs, as businesses aim to attract new staff and retain their existing workforce with more competitive salaries.

Richard Hillam, Director of Arvonia Vets in Gloucestershire, gave his perspective: “We need to recruit more easily, especially from abroad. Although we have recruited from the EU, the time taken on paperwork is significant. We are also finding that recruitment agencies are now very expensive.”

Although net UK sales and orders remain in the red, significant progress has been made over the last quarter towards breaking even. This is reflected in the survey, as the proportion of businesses reporting falling sales has decreased since Q4 2022.

Matt Griffith, Director of Policy at Business West, said: “Despite the continuing challenges facing businesses, it is encouraging to see a rise in positive sentiment amongst firms.

“While the top concerns for businesses during the quarter were general economic conditions, inflation, and general business uncertainty, these are all down since last quarter.

“However, it is still a tough environment for businesses, with cuts to the energy support scheme leaving many firms uncertain about what the next 12 months will bring and the tight labour market continuing to hinder firms’ growth.”

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