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7 Feb 2025

ACT parent company Bira has warned that retailers across Britain face troubled times ahead despite today's Bank of England interest rate cut to 4.5%, as the Bank halves its growth forecast for...

4 Feb 2025

The ACT and legal partner WorkNest are hosting an exclusive webinar on how to remain compliant with employment law while making necessary business changes.

31 Jan 2025

New independent research has confirmed OEM e-bikes are effectively exempt from risk of battery fires, with unsafe post-purchase replacement batteries, conversion kits, and other equipment that...

31 Jan 2025

The UK Government has decided not to go ahead with proposals to increase the maximum power output of e-Bikes to 500W and to permit throttle assistance following a lengthy consultation process.

23 Jan 2025

ACT parent company Bira is calling for urgent government intervention following disappointing December retail figures, which show sales volumes fell by 0.3% following a modest 0.1% rise in...

22 Jan 2025

Cytech's Australian training provider The Bicycle Academy,  which delivers their courses in Brisbane, Sydney, Melbourne, Adelaide and Perth, paid visits to UK Cytech centres late last year...

21 Jan 2025

The ACT is set to deliver a seminar at both the North and South iceBike* events discussing the current challenges and opportunities facing the UK cycle industry.

17 Jan 2025

The ACT has teamed up with employment law, HR, and health and safety experts WorkNest as the association's new legal partner.

10 Jan 2025

The ACT have presented a formal complaint to the BBC, with Director Jonathan Harrison claiming the program was misrepresentative and made "incorrect claims about regulations".

9 Jan 2025

ACT parent company Bira has warned that disappointing footfall figures for December show mounting pressures on independent retailers, with concerning implications for 2025 as business costs...

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Four in ten businesses believe profitability will reduce over the next year

Posted on in Business News , Cycles News

The British Chamber of Commerce’s Quarterly Economic Survey (QES) for Q3 2022 shows a significant decline of key economic indicators, with weakening structural business conditions and confidence a cause for concern.

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The QES is the UK’s largest independent survey of business sentiment and a leading indicator of UK GDP growth. The survey took place between August 22 and September 16, prior to the Government’s energy support package for firms and the mini-budget announcement.

The survey of over 5,200 firms – 92% of whom are SMEs – reveals there have been significant declines for indicators of business sales, cashflow, and profit expectations.

All indicators of business conditions and confidence have fallen significantly from Q2 positions.

More businesses are now seeing their cashflow decreasing, instead of increasing. One in three (32%) firms reported reduced cashflow over the last three months, while 23% reported an increase.

Indicators for business confidence have plummeted; less than half (44%) of firms expect their turnover to increase over the next 12 months, while 25% expect a decrease. Those expecting an increase is down ten percentage points from 54% in Q2.

Profitability confidence has dropped to an even lower level; only one in three (33%) businesses believe their profits will increase over the coming year, while 39% now expect a decrease. This is the lowest level since Q4 2020 at the height of the Covid crisis.

Only 33% of firms reported an increase in domestic sales over the past three months, a sharp decline from the Q2 level of 41%. 24% of firms reported a decrease in sales.

The outlook is particularly bleak for the retail and wholesale sector. The sector is now in its second quarter of negative territory; with far more businesses reporting a decrease in sales rather than an increase. 25% of retail/wholesale firms reported an increase in domestic sales, while 39% reported a decrease.

Alongside the retail and wholesale sector, other sectors are also struggling; almost three-quarters (71%) of hospitality businesses reported they are operating below capacity.

David Bharier, Head of Research at the British Chambers of Commerce (BCC), said:

“This quarter’s results point to a significant decline in business confidence, with a clear shift downwards in many of the key indicators we track. Every sector has seen a falling proportion of firms reporting increased domestic sales, with the retail and wholesale sector particularly affected.

“Diminishing sales coupled with soaring inflation is a toxic mix, and many firms are no longer looking to the future with optimism. Profitability and turnover confidence for the next year have dipped significantly since last quarter. Both measures are heading towards levels not seen since the onset of the Covid crisis.

“While the subsequent energy announcement will have alleviated immediate pressure on firms' energy bills, confidence will have taken a further hit following the market reaction to the mini-budget.

“Many firms are caught in the pincer movement of soaring inflation and rising interest rates. The devaluation of the pound has also added a huge cost base for businesses reliant on imports.

“Businesses now desperately need to see economic stability in order to rebuild the confidence to invest.”

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