Bristol businesses report long-awaited economic uptick

A long-awaited economic uptick has been met with challenges in recruiting skilled staff, according to a recent Business West survey.

Burgeoning confidence among companies across the South West has been welcomed by industry leaders, as domestic sales increase – with more than 42 per cent of firms reporting demand for their products and services had grown.

While the latest quarterly report from Business West was positive, it’s worth noting the results from more than 400 businesses were gathered before the government announcement of the four-week delay to the final lifting of restrictions, the impact of which is yet to be analysed.

The report reveals 45 per cent of the businesses surveyed have tried to recruit staff during the past three months, with 62 per cent saying they had problems in finding the right skills to grow.

Businesses identified emerging post-pandemic and post-Brexit labour market trends and heightened competition for talent spurred by the unlocking of the economy as key factors in their struggles to recruit.

Jim Roach, the managing director of ARV Solutions – a Bristol recruitment firm specialising in the construction industry – particularly highlighted the labour market challenges posed by Brexit, saying:  “The lack of skilled people wanting to or being able to work in the UK from abroad is a source of concern for us.”

The apparent mismatch between labour supply and demand in sectors such as care and construction, coupled with the rush to recruit skilled workers, has led to fierce competition for hires and appears to be pushing up wage demands, according to business owners.

Businesses across the board reported increases in their input costs, especially related to logistics and transportation and, in particular, raw materials. 31 per cent have in turn increased their prices – a number that rises to 40 per cent in the manufacturing sector. A further 35 per cent of businesses plan to increase their prices in the coming quarter.

Net domestic sales may be in positive territory for the first time in a year, but export sales and orders are lagging behind – still dragged down by Brexit related issues and international travel restrictions.

The research also revealed that 70 per cent of businesses surveyed consider climate change an issue for their business, with 45 per cent having implemented plans to reduce their environmental impact and 31 per cent admitting they have taken some steps but could do more.

The biggest drivers of these changes are the values of the business owner, the expectations of clients and the opportunity to win new customers. Cashflow is the most common issue holding businesses back.

Nearly half of businesses also plan to take action to reduce their carbon emissions or environmental impacts in the next 12 months, with electric vehicles, reduced business travel, and investment in solar power being the most common priorities.

Phil Smith says the latest survey results show a ‘remarkable turnaround’  – photo courtesy of Business West

Commenting on the findings, Phil Smith, the managing director at Business West, said: “After 15 months in the doldrums, finally we have some positive news to report, with renewed optimism in the South West economy.

“Nearly half of all businesses felt that the prospects for the UK economy were positive, and an even higher proportion (68 per cent) said that they were feeling confident or very confident about their own business prospects over the next 12 months. This is quite a remarkable turnaround from the height of the pandemic when South West business confidence was at its lowest ebb.

“The sudden resurgence of business activity – has meant that businesses who need to recruit are confronted by in a tight labour market, especially for skilled staff.

“At a busy time for many of the region’s businesses it is pleasing to see that the majority recognise the threats and opportunities presented by climate change, but with many adaptations and investment needed now there are concerns about how these will be funded in the short term.”

Main photo by Ellie Pipe

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