North West firms set to raise prices

Latest BDO Rethinking the Economy survey of 500 leaders of medium-sized businesses reveals soaring costs will see many North West firms raise prices in 2022. Tony McDonough reports

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Recruitment continues to be a challenge for firms, pushing up costs

 

Firms across the North West are set to raise their prices as fuel prices increases, COVID-19 restrictions and staff shortages push up costs.

That’s the latest snapshot from the bi-monthly Rethinking the Economy survey of 500 leaders of medium-sized businesses carried out by accountancy firm BDO. It says almost two-thirds in the region are planning to push up the prices of their goods and services.

However, despite these pressures, nearly two thirds (63%) of companies in the region expect to see their revenues return to pre-pandemic levels within 12 months. There is a sense of cautious optimism looking into 2022 with half of the North West companies surveyed prioritising investment in digital, creating new jobs or international expansion.

More than a quarter of North West businesses are looking to drive growth into the US and another 26% are looking to expand into Asia in 2022. Domestically, growth will come from expansion across the North West region and into the South East of England.

The research provides an insight into the mid-sized businesses which BDO calls the ‘economic engine’. This group of companies comprises the mid-sized, private equity-backed and AIM-listed businesses, which contribute £1.3 trillion to the UK economy and employ almost 8m people.

When asked which area of public spending would have the greatest positive impact on their business in 2022, nearly a third (30%) of North West companies called on the Government to invest in digital infrastructure as a priority for growth.

Despite current concerns around supply chain and talent shortages, this ranked ahead of investment in infrastructure and skills and job creation. Ed Dwan, partner and head of BDO in the North West said: “Businesses in the region have been hoping for a strong finish to a year which started with so much uncertainty.

“Against a regional economy back still reeling from the aftershocks of COVID-19 restrictions, businesses have continued to face issues from staff shortages to rising costs. However, even with continued speculation around interest rate rises North West companies are demonstrating ambition and drive as they plan for 2022.”

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