Prices to go up as businesses tackle main worry of inflation

Saints Street Market in Ipswich town centre

Saints Street Market in Ipswich town centre - Credit: Cathy Frost

Businesses in Suffolk are planning to raise their prices as they struggle with inflation and low profitability, latest data has revealed. 

The quarterly economic survey conducted by the Suffolk Chamber of Commerce for April to June has shown that the key business indicators continue to fall. 

The overwhelming majority of local companies (91%) reported that inflation is their biggest concern.  

Some 88% of manufacturers and 71% of service companies in Suffolk suggested that they are planning to raise their prices. 

Corporate taxation remained the second biggest worry for respondents, with a third of them identifying that as an issue.  

Manufacturers and service companies in Suffolk recorded declines in both projected turnover and profitability for the next 12 months, compared with the first quarter of 2022. 

However, the balances for both remain in positive territory, with more entrepreneurs expecting an improvement rather than a decline. 

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Manufacturers reported a 35%-point fall in their future profitability projections, whilst there was an 18% fall among service firms. 

Recruitment demand remains strong, particularly in the manufacturing sector, although almost all the companies that tried to recruit still experienced difficulties in doing so.  

The recent record-high vacancy levels are probably going to fall away, with future employment expectations showing initial signs of decline. 

Suffolk Chamber is continuing to call for the government to implement a pro-business scheme aimed at lightening both the financial burdens on businesses and through short-term support for small and medium-sized enterprises to offset the rising cost of energy and fuel.   

Paul Simon, head of public affairs and strategic communications at Suffolk Chamber, said: “These latest figures continue to evidence the slow and steady decline in business activity and sentiment that we have witnessed over the last 18 months or so.

Paul Simon, head of public affairs and strategic communications at Suffolk Chamber of Commerce

Paul Simon, head of public affairs and strategic communications at Suffolk Chamber of Commerce - Credit: Suffolk Chamber of Commerce

“At one level it is a testimony to the resilience and fortitude of the county’s business communities that most of the measures recorded in our Quarterly Economic Surveys remain in positive territory. 

“That said, the declines in expected profitability and turnover and the weaknesses in orders and sales, especially in export markets, does show that a pro-business programme of temporary tax reductions could provide the breathing space businesses need to ride out the challenges of the next year. 

“We must do everything we can to avoid even the hint of a recession. Whilst businesses will drive our recovery, the government has a part to play in lifting some of the burdens it has imposed upon companies through its taxation system."