Economic uncertainty concern for businesses as general election looms

Businesses in the West Country are concerned about the state of the UK economy as the general election looms. A survey by South West chamber of commerce Business West found nearly two-thirds of firms (61%) were worried about the UK's general economic conditions.

More than half of those questioned (51%) said business uncertainty was another major issue, according to the Quarterly Economic Survey. Concerns about inflation have eased slightly, but it remained a significant issue for a quarter of companies.

According to the business leaders polled, political events such as the election on July 4 cause uncertainty, which impacts confidence and planning.

Michelle Graham, co-founder and director of Niche Recruitment in Chippenham, said “Potential change of government always causes unsettlement in the labour market and we expect to see the upcoming general election have an impact on the confidence of the economy, just as it starts to settle.

“We have seen a slowdown in the number of roles currently being hired for and feel this is due to uncertainty and lack of confidence in the UK economy. With the general election looming 2024 has got off to a slower-than-anticipated start.”

The survey, which polls businesses across the South West, also revealed 69% had reported difficulties hiring, particularly for manual or technical and professional or managerial roles. Despite this, 79% of respondents said they were looking to recruit full-time positions and 49% for permanent positions.

Labour costs also remain a concern for 66% of businesses, followed by utilities (46%), raw materials (38%), and fuel (29%). Other pressures include finance costs (21%) and import costs (17%).

Matt Griffith, director of Policy at Business West, said: “These findings underscore the ongoing recruitment challenges and capacity issues faced by businesses. Addressing these concerns is crucial for enhancing productivity and growth in the region."

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More than half of firms (57%) had a positive outlook in their own prospects for their next 12 months - a slight decline of 6% since March.

“The business landscape is grappling with ongoing economic challenges and moderate optimism in specific areas," added Mr Griffith. "Businesses still face significant uncertainties and pressures. However, the election outcome, whatever that may be, will at least bring businesses some certainty and a government that will set out an economic strategy for the next five years. This should help our businesses to plan.”