Business confidence remains brittle in Shropshire as cost-of-living concerns and recruitment troubles continue to weigh heavily on the minds of many employers.
These are some of the key findings of the latest economic outlook produced by the British Chambers of Commerce today.
The BCC has marginally upgraded its GDP forecast for this year to 0.4%, but says it expects economic activity to remain very week for the next couple of years.
Its quarterly economic forecast says business confidence has begun levelling off after a brighter start to the year.
Shropshire Chamber of Commerce chief executive Ruth Ross said: “There is no doubt that business confidence remains brittle across many parts of our economy, and the labour market is still very tight.
“The cost of doing business continues to weigh heavily on the minds of business owners – there is no doubting the fact that many SMEs are struggling to rebuild confidence after three years of economic shocks.”
The BCC believes the UK economy is set to avoid a technical recession, but says growth will be ‘so feeble that it will be hard to spot the difference’.
Vicky Pryce, senior member of the BCC Economic Advisory Council, said: “The BCC’s latest forecast shows the UK economy is continuing to teeter on the edge of a recession.
“But the fact is, that with growth predicted to hover so close to zero for three years, it will still feel a lot like one for most people and businesses.
“The impact this will have on consumer spending, coupled with a poor trade performance, will only generate more uncertainty for firms.
“The Bank of England’s own forecasts take a similarly dour view, so firms will be watching closely to see how this feeds into decision-making around interest rates.”
Shropshire Chamber has launched its latest quarterly economic survey to gauge the views of the county’s business community.
The anonymous survey – which is open to all businesses, whether or not they are members of the Chamber – is collecting information about trading conditions during the latest quarter of this year.
It questions employers on a range of key issues including cashflow, sales, skills, recruitment, training, investment, and business confidence.
Ruth Ross said: “The results are used by multiple Government departments, as well as the Bank of England, to understand the business climate. Every business voice matters – the louder we shout, the greater the impact we can have.”
Today’s BCC report says the current consistently low economic growth is comparable to previous periods of economic shocks and recessions such as the oil crises of the 1970s and financial crash of 2008.
But despite the gloomy economic outlook, it says average earnings are now expected to grow more strongly over the next three years, with 5.5% growth in 2023 and 3.5% in 2024 and 2.5% in 2025.