Latest Updates From Surrey Chambers CEO – 22nd August 2022
22nd August 2022
As we head into the busy time of the year, where businesses start to gear themselves up after a relatively relaxing summer, the challenges continue to build. The labour market remains incredibly tight adding to the growing list of concerns businesses are facing. The latest figures show little improvement for employers over the last quarter. Despite the small increase in employment levels, the number of job vacancies in the economy remains around the highest on record. Competition for skills and labour continues to drive up wage costs also fuelled by the mounting pressure from consumer price increases. Skills and labour shortages have reached crisis point for many firms. The impact is being felt in their ability to meet customer demand and forcing some to turn away new business, because they simply do not have the human resource. This is restricting growth and business confidence and is a serious and urgent problem. On top of all of this, firms are now grappling with the highest inflation in almost 40 years; the largest spike in interest rates in three decades; ongoing supply chain disruption; and eye watering energy bills. There is a limit to how much additional cost business can absorb. We continue to lobby the government to help ease the growing pressure on the labour market by carrying out an immediate review and reform of the Shortage Occupations List (SOL) to include more jobs at all skill levels. This will give firms breathing space to train and upskill their workforce. We have over a million more job vacancies than people available to work, so the sooner we start the SOL review, the better.
The rise in Consumer Prices Index inflation to 10.1% is the tenth monthly increase in a row and another record high. This higher than expected inflation increase, alongside eye-watering energy prices, confirms the severity of the cost of doing business crisis. This squeeze on businesses’ operating costs is also reflected in the latest Producer Price Inflation figures which show a 22.6% rise in the year to July 2022, which remains among the highest levels since records began in 1985. Businesses want to support their people, they want to invest and grow and they don’t want to put prices up for their customers, but they are left with little choice. Speaking to local businesses we have had a number of examples where increases in raw materials are way above the rises mentioned above. Our suggestion to Government is to bring businesses’ energy costs down by lowering the VAT rate from 20% to 5%.
Closer to home
September sees the Surrey Chambers events calendar back to a respectable level of face-to-face interaction between businesses and we look forward to meeting many of you and sharing stories of success as well as challenges. The launch of the Woking International trade forum takes place this month. Set up by Surrey Chambers and supported by Woking Works we will be providing peer support alongside expertise to anyone thinking of embarking on an International Trade strategy; anyone looking to increase their international footprint, and anyone just interested in the subject! We will be connecting with Chambers across the World to bring interesting opportunities to the Forum. For those just starting out or in the first 3 years of their business we have once again put together a fantastic programme of topics for our Start Up Academy. We can only do this due to the generosity of our more experienced business members and we thank each of them for their continued support.