One thing is certain in our February 2017 economic statistics report:?stagnant revenues could mean an increase in costs is likely to eat into profit margins ? and RSA’s Economic Imperative?study only helped emphasise the point. It found that?756,000 businesses expect revenues to shrink due to a prophesied slowdown in?consumer spending.?Further costs will be driven by the rising price of imported goods?and the apprenticeship levy ? some have branded it a payroll tax.? The research comes at a time?when 51?per cent of SMEs, according to RSA, think the government is not doing enough to foster?growth. And at the top of reasons why is the increase in business rates set to shake the corporate world on 1?April. A fifth of companies expect to see an instant rise of 40 per cent, even after the government’s plan to help those hit the hardest?kicks in. Indeed, chancellor Philip Hammond announced thoughts at the end of February on giving extra funding to small firms?? ?3.6m worth, claimed?FSB East Midlands development manager Natalie Gasson.?She explained, as part of the?February 2017 economic statistics roundup,?that the business rates would lead to 55 per cent of companies reducing, postponing or cancelling investment. “Of the SMEs?facing an increase in business rates, almost one in five may ultimately consider closing down or selling the company,” she explained. “While many businesses which may have contemplated the possibility of closure will ultimately find a way to carry on, the current level of anxiety within the SME?community should worry policymakers. Profitability across the SME?community is already falling. The costs of doing business are now at their highest levels since early 2014.” As such, bosses will undoubtedly be watching the Budget on 8 March to see if it delivers. But companies will not be alone in feeling the financial burn. Our February 2017 economic statistics report found that?due to the pound’s weakness, combined with?the?fall in energy and food prices, inflation is set to?rise to three per cent. As such, numerous retailers will pass on costs to consumers. The British Chambers of Commerce?(BCC)?claimed?the fall in the value of the pound?is squeezing domestic sales margins, and thus increasing the cost base of UK businesses. As a result, 54 per cent were set on increasing?the prices of products and services over the next 12 months. ?The falling pound has been a double-edged sword,”?said?Adam Marshall, director general of the BCC. “Nearly as many export?bosses say the low pound is damaging them as benefiting them. For firms that import, it?s now more expensive, and companies may be?locked into contracts with suppliers, unable to be responsive to currency fluctuations. ?Inflation rates aren?t high by historical standards, but they are still putting pressure on companies. Currency fluctuations aren?t something in the government?s direct control, and they are likely to continue as the Brexit transition unfolds. Ministers must do everything in their power to help businesses keep costs down and stay competitive. Alleviating many of the up-front costs facing companies should be a priority for the Budget in March.? ONS labour market statistics, on the other hand, marked some good news ??a 37,000 rise in employment?and a minute increase?in productivity. However, pay growth remains sluggish and the dreaded skills shortage is rearing its ugly head. It’s a situation made clear by?UK employers struggling to fill roles with the right candidates. And for the?February 2017 economic statistics piece we sought to find out more on the matter.Labour Market Outlook research from the CIPD and The Adecco Group?claimed there was?a near record number of?748,000?vacancies. After?surveying?over 1,000 employers, the most common response to labour shortages was?to leave the positions empty. This, the report claimed,?”reflected the tightness of the domestic labour market and highlighted?the UK is attracting and retaining fewer EU nationals”. Of this,?John Marshall, CEO of The Adecco Group UK & Ireland, said:??The big decisions Britain took in 2016?are beginning to show in the labour market. Whilst the outcome of Brexit negotiations is still uncertain, employers? access to EU migrant workers is likely to change. Investing in young people is a solid long-term strategy, but employers also need to face the facts and prepare for a situation where they might lose access to significant numbers of skilled EU workers in the near future.? Image:ShutterstockBy Shan? Schutte
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.