Worcester Businesses Are Feeling The Same Cost-Pains As Households
Increased transport charges, driven by recent rises in fuel prices and public transport fares, are the biggest cost-problem for owner-managed businesses.
Soaring energy costs (gas, electricity, and oil) are the second-highest cost problem for regional boardrooms.
These are among the top-line findings of the latest survey of owner-managed businesses run by Bishop Fleming Rabjohns, the accountancy firm with offices and clients throughout the West, Wales, and South West.
While media headlines have highlighted the impact on household budgets of rising energy and fuel costs and food inflation, Bishop Fleming Rabjohns asked companies how those cost increases are affecting their businesses.
Soaring transport costs were identified as the biggest issue by more than a third of respondents (41%), with more than a quarter (25.6%) most hit by increased energy costs.
Any householder will recognise how increased transport costs and energy prices are hitting family budgets, so it is no surprise that those factors are having the same effect on the region’s businesses.
But this could make our employers uncompetitive, according to almost a third of our respondents (32.5%) who said that the region is at a disadvantage on transport and energy costs.
More than a third (37%) confirm that those cost increases will force them to cut jobs and investment, while almost half (40%) are having to consider cuts in employment and investment.
One of the most telling findings of this survey is that West businesses are sitting on a potential wage-cost volcano.
While a small minority (8%) quoted wage-increases as an immediate major cost factor, our respondents recognised the pressure of cost inflation on their employees’ incomes, and were split 50:50 between those experiencing pressure for pay-rises to match cost-inflation and those whose employees accept that zero pay-rises are ‘better than losing their job’.
This is a potential volcano, not just for the West but for the entire country. Right now, there is little pressure from private sector employees for pay reviews to match the rising inflation that is reducing their spending power: but that could change very quickly if inflation continues to soar.
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