Hampshire Chamber finds county’s businesses are trying to remain resilient despite pressures

Despite mounting concerns over high inflation, businesses in Hampshire are doing their best to remain resilient.

This is according to Hampshire Chamber of Commerce’s latest quarterly survey, which found four out of five respondents said inflation was more of a worry now than it was three months ago.

In turn, more than half say they are under pressure to raise prices for customers in the coming months, with rising labour costs the most commonly cited reason across manufacturing and services firms.

Rising costs of gas, electricity, petrol, diesel and raw materials were also significant factors.

The survey also found 85 per cent of companies which have tried to recruit staff in the past quarter have has difficulties.

Service industries such as retail, hospitality, professional services and the creative sector have felt competition in the search for skilled manual or technical staff most acutely.

This has led to 64 per cent of respondents saying they are operating below capacity.

Despite these challenges, however, respondents have generally kept most investment plans on track in the past quarter.

And there is optimism about both turnover and profitability over the next year. Four out of ten respondents (42 per cent) expect turnover to improve in the coming 12 months compared to 37 per cent who expect it to remain the same and 20 per cent who believe it will worsen.

On profitability, 38 per cent expect it to improve and 31 per cent forecast it will worsen, with the rest anticipating no change.

Ross McNally, Hampshire Chamber Chief Executive and Executive Chairman

Responding to the findings, Hampshire Chamber Chief Executive and Executive Chairman Ross McNally said: “Higher wage demands and rises in other input costs, for example in energy and raw materials, naturally impact the cost of doing business.

“It is clear from the survey that we remain in a very challenging period characterised by high inflation and interest rates.

“Yet, our research also underlines the resilience and determination of members to go for growth and achieve the turnover and profitability they need to sustain their businesses and prosper.

“A key priority is to preserve the scope for investment which many of our respondents have indicated they are trying to do.”

Ross added: “To help achieve the business-led recovery we all want to see after several challenging years of successive economic shocks, we reiterate the need for government to match our members’ remarkable sense of optimism with a clear long-term plan for economic growth.

“Concerns over high wage costs should give the government and Bank of England pause for thought on their next steps.

“Policymakers should consider very carefully indeed the impact on business activity of any further interest rate rises.

“The economy needs to rally soon to support growth and trading prospects.”