Rising costs for energy, rent and products and materials in the build-up to Christmas are the top concerns for Yorkshire businesses in the coming weeks, according to the latest report from accountancy and business advisory firm BDO LLP.
The bi-monthly Rethinking the Economy survey of 500 mid-market businesses has revealed that the rising cost of rent is causing the greatest concern for nearly a third of businesses in the region – the highest rate across any UK region.
The survey showed that half see higher energy costs as their biggest challenge in the final few weeks of the year, together with supply chain-related issues (43%). One in five Yorkshire businesses are most worried about the rising price of materials and products.
As businesses in the region face significant cost pressures and disruption to the delivery of products and services, many are taking proactive steps to address the latest challenges facing their business. According to the Rethinking the Economy survey, a third of Yorkshire companies intend to launch new products and services to create additional revenue streams, while a further 33% intend to seek investment to cover financial shortfalls.
However, despite the challenges facing businesses in the final month of the year, all Yorkshire businesses surveyed stated that they feel more optimistic about business prospects going into 2023, compared to this time last year, marking a shift in sentiment since COVID-19 restrictions were lifted.
Terry Jones, Partner and Head of BDO LLP in Yorkshire & Humber, commented:
“Hearing businesses report that they are in a better place than this time last year is a positive but there’s no doubt that trading conditions remain extremely challenging for many Yorkshire businesses, following a period of sustained pressure over an extended period of time.
“However, despite the concerns surrounding rising costs and supply chain disruption, there is a real resilience and determination amongst Yorkshire businesses to ride out the economic storm thanks to a clear focus on growth.”
The Rethinking the Economy survey showed that half of Yorkshire businesses have changed their approach to raising funding in the last three to six months due to the economic climate, with more than a quarter admitting that they are seeking funding earlier than planned to support growth plans.
Jones added: “This positive approach to funding and growth lays the perfect foundations for 2023. However, businesses in the region cannot do it alone. With rising costs set to be an enduring theme throughout next year, Yorkshire businesses are calling for more targeted support to help drive growth in mid-market businesses – the engine of the UK’s economy.”
According to the survey, 40% of regional businesses believe the Government should be providing more investment in apprenticeships and skills programmes for businesses in 2023, with a further 33% looking to the Government for new policy frameworks for recruitment and workforce upskilling. The aim of the frameworks is to tackle labour access issues, increase access to overseas workers, as well as help businesses access the skills they need.