BUSINESSES in the North-east are increasingly worried about taxes, with just over two weeks until the Chancellor announces her Budget.
The latest findings from the Aberdeen & Grampian Chamber of Commerce’s Quarterly Economic Survey indicate that worries about taxes have surged, pushing them up the list of risks for companies in the area – with 61% of firms in the North-east identifying tax issues as a major obstacle to growth, up from 48% three months prior.
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The survey data highlight a significant difference in this critical area between North-east Scotland and the rest of the country, with a 13% gap, as the region prepares for another tax-related challenge in the energy sector.
The Quarterly Economic Survey is the UK’s largest and most established independent survey on business outlook, involving companies from Chamber of Commerce’s across across the UK, with over 5,000 participants – with a detailed report from Aberdeen & Grampian released today for detailed comparison of regional and national data. This marks the first time companies have shared their views since the new administration took office in July.
Alongside tax concerns, this latest dataset covering mid-August to September 2024, shows the region’s economy in something of a “holding pattern” according to AGCC Chief Executive Russell Borthwick, “with companies sitting on their hands, waiting to see what new government business and taxation policy will mean for them”.
The latest report also shows that about half of North-east businesses experienced no change in domestic sales for the quarter, with only 28% reporting an increase – the lowest figures in three years – against a more positive trend across the UK.
Additionally, the struggle to find skilled workers continues, with 79% of companies in the region facing challenges in hiring the right staff, a 9% rise from the previous quarter.
These challenges, along with other issues, mean that only 24% of respondents expect to grow their workforce this year, a 12% drop from three months ago, marking the lowest numbers since the first quarter of 2021.
Price inflation remains slightly higher in the North-east than the UK as a whole, with labour and utility costs being the primary factors driving this. However, there are signs that these pressures are starting to ease over the last year.
Commenting on the publication of these figures, Aberdeen & Grampian Chamber of Commerce Chief Executive Russell Borthwick said:
“Although less than a fifth of responses to the survey were from companies in the energy sector, it’s apparent that the huge uncertainties facing the future of oil and gas operations in the North Sea are having a knock-on effect on confidence in the wider North-east economy.
“The Chamber has been very clear in its warnings to the new government about the catastrophic economic and jobs impact of its intended taxation policy towards the North Sea.
“The North-east results of the Q3 survey suggest this is a spectre that looms large.
“Future sales pipeline, turnover and profit forecasts are all increasingly pessimistic and significantly worse than the UK results.
“That said, we should recognise that since the survey closed there has been some positive news for our region with the confirmation that Great British Energy will be headquartered in Aberdeen and the announcement of a number of exciting new clean energy projects in the region.
“Furthermore, the North-east continues to outperform the rest of the country on exports, largely driven by our world class energy and food, drink, agriculture and fisheries sectors.
“Our message to governments at all levels, as they pore over these latest results, is listen to what businesses in this region are telling you, sharpen up your policy-setting and decision-making, cut regulation and create the conditions for the private sector to drive the meaningful economic growth we are crying out for.”
Download the report HERE.
