The latest business survey results from the UK Office for National Statistics paint an interesting picture of how companies are faring this summer. There’s a mix of continuing challenges but also some signs of resilience. Let’s dive into the key findings.
Business insights and impact on the UK economy
Business insights and impact on the UK
Turnover Trends Around 1 in 4 businesses say their turnover decreased in June compared to May. This indicates an increasing percentage of companies seeing declines as we enter the summer season. The most commonly cited factors impacting turnover are rising materials costs, economic uncertainty, higher labour costs, and increased financial expenses.
However, over a quarter of firms report no major challenges to turnover presently. Looking ahead, close to 1 in 5 businesses expect turnover to fall again in August. The accommodation, food services, and retail sectors are bracing for the biggest drops.
Pricing Pressures Half of businesses say the prices they pay for goods and services rose in June versus May. The accommodation and food industries saw the steepest input price hikes at 75%.
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Meanwhile, just 20% of companies increased their own prices sold – the lowest level since March. As for expectations, around a quarter of businesses foresee raising prices in August, down from 30% last month.
The primary drivers remain energy bills, raw material costs, and labour expenses. But over a third of enterprises currently have no plans to hike prices next month.
Energy Cost Impacts Over a third of businesses report their production and suppliers have been affected by surging energy bills in early July.
The accommodation and food sector stands out here with 70% of firms impacted.
Since March, there’s been a steady increase in the share of businesses feeling the pinch from sky-high electricity, gas and fuel costs. This represents a huge risk heading into the winter months.
Managing Price Rises Almost two-thirds of companies indicate they’ve been affected by broader price increases in at least one way. Smaller businesses with less than 10 employees appear cushioned comparatively. The most common effects are absorbing extra costs and passing price hikes onto customers.
Stock Level Trends In June, around 8% of businesses had lower raw material inventories than in May, while 7% saw finished goods stocks fall month-over-month. Meanwhile, about 1 in 5 firms maintained consistent inventory levels.
The accommodation and food industry reported the largest drop in raw materials at 26%. Around 6% of enterprises admit to stockpiling goods presently – unchanged since March – as supply uncertainties loom.
Final Thoughts
UK businesses continue grappling with inflationary headaches, some worse than others. Turnover expectations remain under pressure too. However, many companies seem to be demonstrating resilience for now, adapting operations and avoiding full-on panic.
The path ahead hinges greatly on whether soaring energy bills and other costs begin moderating later this year. If high inflation persists, more turbulence likely awaits. But for the moment, British enterprises appear cautiously optimistic overall. The next few months will be crucial as the country heads towards the winter season.