South Yorkshire commerce sees lowest growth in two years

Commerce is increasing at the slowest rate in two years, and businesses are having increased difficulties when trying to recruit staff, according to the Quarterly Economic Survey for the third quarter of the year (Q3).

The South Yorkshire Chambers of Commerce include Doncaster, Sheffield and Barnsley and Rotherham Chambers.

The study showed that more firms are seeing a decrease/stagnation in trade than an increase, putting the balance at -4 percent.

The percentage of businesses operating below full capacity has increased to 56 percent, from 45.

Sixty five percent of firms reported that inflation was more of a concern than three months ago, and 15 percent reported increasing concern about the exchange rate.

These statistics predate the dramatic fall of the value of the pound that took place following the unveiling of the government’s mini budget last month.

The study also highlighted increased difficulties in recruitment.

Nearly 90 percent of firms have experienced difficulties when recruiting, and only 20 percent successfully grew their workforces.

The most common reason for recruitment challenges was reduced growth.

The CEOs of the Chambers discussed the survey in a joint statement: “This has been a challenging quarter for the region’s economy and our survey reflects that. The unwelcome news that the owners of Doncaster Sheffield Airport (DSA) plan to close the facility was unsettling for businesses across South Yorkshire and devastating for those who work there.

“We welcomed the supportive statements from the Prime Minister and MPs on finding a positive way forward for DSA – something that would boost business confidence in our region. But we need to see action and clarity from the government, as our open letter published yesterday makes clear.

“The developments at DSA took place against a broader backdrop of concern about business conditions in the UK and globally. Our survey records how the rising cost of energy and wages are feeding through to the wider economy.

"Over Q3, trading conditions weakened, cash-flow positions deteriorated and while recruitment difficulties continued, the balance of firms expecting to grow their workforce fell to its lowest in 18 months. The turbulence on the financial markets caused by the government’s ‘Mini Budget’ is not the best start to this quarter.

“The most important thing now is that policymakers do everything possible to support business confidence. Businesses need to know that the economy will return to a position soon where costs are not spiralling upwards.”

They continued: “Our survey ended before the government’s energy support package went live. It will be a vital lifeline and we welcome it. The outlook for energy prices is highly uncertain but if the circumstances demand it, the government must be prepared to extend and refine the support, especially for the many energy-intensive employers based in South Yorkshire and beyond.

"Along with Chambers across the UK we are calling on the government to empower Ofgem to strengthen regulation of the energy market for businesses.”

In these confusing and worrying times, local journalism is more vital than ever. Thanks to everyone who helps us ask the questions that matter by taking out a subscription or buying a paper. We stand together. Dominic Brown, editor.