- Nearly a third of businesses in the region admit that the rising price of materials and products is one of their top concerns in the run-up to Christmas; supply chain disruption is also seen as a top challenge
- Despite significant pressures, East Anglia businesses are more optimistic about business prospects going into 2023, compared to this time last year.
Rising costs for recruiting the best talent, together with the price of products and materials in the build-up to Christmas, are the top concerns for East Anglia businesses in the coming weeks, according to the latest report from accountancy and business advisory firm BDO LLP. The bi-monthly Rethinking the Economy survey of 500 mid-market businesses has revealed that the rising cost of products and materials is causing the greatest concern for nearly a third of businesses in the region – with more than a quarter admitting that the demands of increased wages are adversely impacting on the cost of recruitment. The survey showed that 29% see supply chain disruption as one of their biggest challenges in the final few weeks of the year, together with the ongoing effects of Brexit (29%), such as increased customs legislation, supply chain problems, and immigration restrictions impacting access to labour. As businesses in the region face significant cost pressures and disruption to the delivery of products and services, many are taking proactive steps to address the latest challenges facing their business. According to the Rethinking the Economy survey, more than a quarter of East Anglia companies intend to pause international expansion plans, while a further 23% intend to seek investment to cover financial shortfalls. However, despite the challenges facing businesses in the final month of the year, an overwhelming number of East Anglia businesses surveyed (87%) stated that they feel more optimistic about business prospects going into 2023, compared to this time last year, marking a shift in sentiment since COVID-19 restrictions were lifted. Peter Harrup, Partner and Head of BDO LLP in East Anglia, commented: “Hearing businesses report that they are in a better place than this time last year is a positive, but there’s no doubt that trading conditions remain extremely challenging for many East Anglia businesses, following a period of sustained pressure over an extended period of time. “However, despite the concerns surrounding rising costs and supply chain disruption, there is a real resilience and determination amongst East Anglia businesses to ride out the economic storm thanks to a clear focus on growth.” The Rethinking the Economy survey showed that 68% of East Anglia businesses have changed their approach to raising funding in the last three to six months due to the economic climate, with more than a quarter admitting that they are seeking funding earlier than planned to support new product and service development. Harrup added: “This positive approach to funding and growth lays the perfect foundations for 2023. However, businesses in the region cannot do it alone. With rising costs set to be an enduring theme throughout next year, East Anglia businesses are calling for more targeted support to help drive growth in mid-market businesses – the engine of the UK’s economy.” According to the survey, 23% of regional businesses believe the Government should be working towards new trade agreements to create opportunities for market growth and exports, with a further 23% looking to the Government for new policy frameworks for recruitment and workforce upskilling. The aim of the frameworks is to tackle labour access issues, increase access to overseas workers, as well as help businesses access the skills they need. Image provided by BDO LLP