Business Confidence Falls Dramatically in South Yorkshire, Following Autumn Budget

In line with national trends, business conditions and confidence levels have weakened dramatically across South Yorkshire, ever since Government’s Autumn Budget was unveiled.

This is as per the findings of the region’s latest Quarterly Economic Survey, which was carried out between the 11th of November (just over a week after the Budget) and the 9th of December. Informed by approximately 300 responses — from firms of all different shapes, sizes and industries — the results paint a troubling picture of how the local economy is fairing right now, and how businesses have ultimately born the brunt of some of the more controversial measures announced by Westminster.  

After charting a positive trajectory in recent surveys, key indicators like domestic sales performance, exports, and cashflow positions have all taken a sharp downward turn this quarter, while confidence in turnover and profitability levels has similarly declined. Conversely, the proportion of firms expecting the prices of goods & services to go up has increased, reaching a concerning two-year high of 59%.

Unsurprisingly, these downturns have had a knock-on effect for investment intentions as well, with nearly a quarter of survey respondents claiming that they have had to scale back on investing in their plants or machinery, while plans for training have hit their lowest recorded levels since Q1 of 2023.

All these worrying trends chime with those being witnessed elsewhere around the country, with the nationwide Quarterly Economic Survey results (which the regional QES feeds directly into) raising the very same concerns. And, just as with that UK-wide dataset, it is clear that the blow to business confidence being observed here in South Yorkshire can largely be attributed to the Autumn Budget, as well as to a few other external factors.

Speaking about this, the respective Chief Execs for Doncaster, Sheffield and Barnsley & Rotherham Chambers of Commerce (who conduct the QES in South Yorkshire) issued the following joint statement:

“It’s evident that the Autumn Budget is already exacting a heavy toll on business owners, who are having to make some tough calls as a result; whether it’s scaling back their investment intentions; putting up their prices; or potentially even thinking about reducing their workforce levels.

“Although there are undoubtedly other factors at play contributing to this collapse in optimism, it’s hard not to point at what our survey respondents told us is their biggest source of consternation right now. Ever since 2021, inflation has consistently remained the number one worry for firms here in South Yorkshire, often eclipsing any other anxieties by a wide margin. Yet, this time around, corporate taxation towered well above it, being cited as a major issue for over 63% of firms. For context, in the previous quarter leading up to the Autumn Budget, this number was at only 37%.

“In times of economic turmoil, Westminster ought to be encouraging entrepreneurialism and growth. Yet the consequences of their Autumn Budget — and specifically the corresponding hike in the National Insurance contributions paid by employers — are plain to see here. Business confidence is now falling at an alarming rate.

“With that said, while we do welcome planned interventions to restore stability in the long term, such as the forthcoming industrial strategy, something needs to be done in the here and now to convince businesses that the Government is attuned to their plight and that it indeed has their back.

“Of course, we know that South Yorkshire’s ever-resilient private sector will capably rise to whatever challenges await them in the year ahead, and can also take solace in the fact that great business always a way. No matter how the tough the economic conditions may get. Not to mention, we here at the South Yorkshire Chambers will be right at a hand to offer whatever support we can to these intrepid firms, and to hopefully play a big role in their success going forward.”

The Quarterly Economic Survey is the nation’s largest independent review of business sentiment. Led by the British Chambers of Commerce (BCC), it asks a series of standardised questions — that are repeated every three months — to monitor if there are any fluctuations, developing trends or other points of interest that help shed light on how the UK’s private sector is currently fairing.

Conducted by the respective Chambers of Commerce for Doncaster, Sheffield and Barnsley & Rotherham, the South Yorkshire iteration of the QES is sponsored by Clear Insurance Management and the South Yorkshire Mayoral Combined Authority. The latest results can be found here.