The BCC’s Quarterly Economic Survey – the UK’s largest and longest-running independent business survey – shows measures of business confidence and business conditions slightly improved in Q2 2024, albeit from a very low base.
38% of firms (compared with 36% in Q1) said they had seen an increase in domestic sales over the previous three months, while 43% reported no change, and 20% a decrease.
After a static picture in Q1, business confidence has increased slightly in Q2. 58% of firms say they are expecting an increase in turnover over the next year compared with 56% in Q1. 29% expect no change and only 13% expect a decrease.
With inflation easing to target – the data also reveals that fewer firms (39% compared to 46% in Q1) expect to hike their own prices in the coming months.
The survey, which was conducted between 13th May and 10th June, of nearly 5,000 firms across the UK (91% of whom are SMEs – fewer than 250 employees) – also reveals that despite improved trading conditions most firms are still not increasing investment.
The Thames Valley report, sponsored by James Cowper Kreston, has also been released and the Chamber welcomed Sue Staunton, Joint Managing Partner, James Cowper Kreston and Stuart Morrison, Research Manager, British Chambers of Commerce, who discussed the results from a national and local level with Tim Major, Senior Account Manager, Thames Valley Chamber of Commerce. This discussion can be listened to here
Sue Staunton, Partner at James Cowper Kreston, said: “The last quarter’s survey shows a business community in the Thames Valley exhibiting confidence in their markets, albeit acknowledging the challenges being faced in recruitment of the staff needed to capitalise on the economic improvements they are expecting.
“Overall, there appears to be confidence in the economy going forward with over 70% of businesses expecting improved turnover in coming months with well over half expecting that to lead to increased profitability. With the recent Election results it will be interesting to see in the next quarter whether and how this impacts upon the views of those polled.”
Paul Britton, CEO at the Thames Valley Chamber of Commerce said: “Once again results from the Thames Valley show us that the issue of recruitment is one that continues to be a challenge to businesses across the Thames Valley and this latest report highlights the challenges of the market.
“With one in three TVCC members trading internationally, confidence and expectations in overseas orders remains a real concern. This is why we will continue to pressure Government for an export strategy to get business moving from the UK to new markets.”
David Bharier, Head of Research at the British Chambers of Commerce said: “The latest results from our QES show that both business conditions and business confidence have improved, albeit from a relatively low base.
“The last four years have seen SMEs deal with one crisis after the other, from Covid lockdowns to supply chain breakdowns and new trade barriers with the EU. As some of these crises have ebbed, more SMEs are regaining confidence and reporting increased sales and cash flow.
“The data also show that concern about inflation among businesses has dropped to levels last seen in 2021 as fewer firms expect to raise prices. A Bank rate cut later this year will help bring down borrowing costs.
“However, investment levels remain a long-term concern and significant sectoral divergences remain, as sectors such as hospitality and retail continue to report far tougher trading conditions.
“The new Government should capitalise on the confidence momentum and focus on addressing skills shortages, trade barriers, and unlocking the potential of AI and green innovation.”
Shevaun Haviland, Director General of the British Chambers of Commerce said: “It’s really encouraging to see positive shoots of recovery from businesses across the UK.
“Confidence has been improving among companies in recent months. Our data show the tangible impact of that positivity, as businesses report improved sales and cashflow. But investment levels remain an area of concern.
“Our message to the new Government is clear. We need a long-term economic plan that has the green transition at its heart, with a workforce fit for the future, living in thriving local places and powered by businesses that are globally facing and digitally enabled.
“Business stands ready to work in partnership with Government to capitalise on the positive signs our data is showing.”
Tim Major, Senior Account Manager, Thames Valley Chamber of Commerce said “With a new government in place, policy directions are expected to shift, influencing everything from taxation and regulation to international trade and infrastructure development. For businesses, understanding these changes and anticipating their impacts is crucial for strategic planning and risk management.
“Domestic policies aimed at fostering economic growth and innovation will be in the spotlight. Initiatives related to digital infrastructure, green energy, and skills development are expected to play a significant role in shaping the business environment. The government’s commitment to levelling up regional economies also presents prospects for businesses in the Thames Valley, a region known for its vibrant tech sector and strong economic performance”.
