The difficulties within both the domestic and international economies are adding to the disruption for local and regional businesses.
The latest survey results of West & North Yorkshire Chamber of Commerce point to a slowing down of economic growth and a resulting loss of confidence looking forward. As a result, many firms are beginning to look at their spending plans for the rest of the year and beyond. The Chamber says that more measures from the Government are now needed to head off or minimise the damage coming towards us.
The Chambers says that the last four quarters of survey results have shown surprising resilience, with demand remaining buoyant, but supply chain problems holding back growth. That has now stuttered, with inflation and a tight labour market combining with supply chain disruption to increase uncertainty for many. Manufacturers, in particular, are now showing a slowing down of growth, in both domestic and export markets.
The pressures, say the Chambers, are compounded by falling confidence and investment plans, as many look to retain cash within their businesses due to the increasing uncertainties. Price rises are expected to continue throughout the rest of this year, and so cashflow difficulties and falling profits are also feared.
Amanda Beresford, Chair of West & North Yorkshire Chamber of Commerce, said:
“Strong head winds are forcing many companies to pause investment decisions as they prepare for an uncertain second half to 2022. Volatility in supply is making pricing difficult for many as inflationary pressures continue to rise. Now is the time for government intervention to ease the burden on energy costs through reductions in VAT.”
Martin Hathaway of Mid-Yorkshire Chamber of Commerce added:
“I am pleased to see B2B domestic sales growth, but it is concerning that manufacturing sales have slowed.
“We are recovering, but we have not recovered yet.
“Transport disruption coupled with the cost of living, fuel and raw materials is causing economic unrest.
“It is crucial that we see Government support and levelling up action to propel our region to the heights that we have the talent to reach.”
The Chair of Leeds City Region Enterprise Partnership, Mark Roberts, said, “Inflation is the greatest challenge currently facing the majority of businesses. With CPI rising to 9.1% in the past month, and forecasts suggesting a peak above 10% in late 2022, it is likely that this issue will persist in at least the short to medium term. This is something that businesses within the region are all too aware of, with business concerns around inflation reaching a 30-year high.”