Liverpool Chamber chief executive Paul Cherpeau urges likely new Prime Minister Andy Burnham to urgently address rising costs for businesses as new data shows a slump in investment. Tony McDonough reports
A new economic survey shows the proportion of firms planning to increase investment has fallen to its lowest level since the pandemic.
And, following the worrying report from the British Chambers of Commerce (BCC), Liverpool Chamber chief executive Paul Cherpeau is urging likely new Prime Minister Andy Burnham to urgently address the soaring cost of doing business.
According to the latest BCC Quarterly Economic Survey, just 17% of responding firms plan to increase investment in plant, machinery or equipment over the next three months, down from 21% in the previous quarter.
At the same time 26% said they plan to cut back on investment and the remainder expecting no change. Business confidence has also slipped, with 44% expecting improved turnover in the next 12 months, down from 49% in Q1, and 23% expecting it to decline.
Less than a third (29%) reported increased sales over the previous quarter, while a similar number reported a decrease.
Concerns around inflation rose to nearly two thirds of businesses (66%), up significantly from 50% in Q1, with almost twice as many respondents citing fuel costs as a key pressure compared to the previous quarter.
Labour costs remain the greatest price pressure, cited by 70% of responding businesses and felt most acutely by firms in the construction and engineering sectors.
Paul Cherpeau said: “The cost of doing business remains high and sales growth is slow, and this is understandably having a negative impact on the confidence and investment intentions of many firms here in Liverpool city region.
“Not for the first time, we see retail and hospitality – two crucial sectors in our local economy – bearing the greatest brunt of those headwinds.
“And we know from our conversations with members in construction and engineering that they are especially feeling the burden of higher labour costs, which in turn is depressing their ability to offer apprenticeships or hire young people.
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“Geopolitical uncertainty and punitive policies at home have created an almost instinctive aversion to risk among many business owners, who will need to see a clear path of future growth and fewer barriers to trade before they will consider making investment decisions.
“That’s the task at hand for the Government – and the new Prime Minister – moving forward. They must cut red tape, reduce the tax burden, and deliver policies that incentivise, rather than stymie, ambition.”