'It could be so much better': Local business leaders respond to sobering Suffolk Chamber economic survey

The latest Quarterly Economic Survey from Suffolk Chamber of Commerce paints a stark picture of business sentiment across the county, with more than 80% of respondents now citing tax concerns as their primary worry - double the number from just twelve months ago.

'There must be no further tax hikes' as Suffolk Chamber warns of 'grim' outlook for local businesses

The Suffolk Chamber of Commerce's latest economic survey shows widespread pessimism and decline among local businesses, with more than 80% expressing concerns about tax levels.

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• 131 days ago

This dramatic shift marks the first time that taxation has significantly overshadowed inflation in recent years, with price rise concerns dropping to 40%, their lowest level since Q2 2021.

"This survey makes for rather grim reading as local growth and confidence seem to be in danger of leaking away," says Paul Simon, head of public affairs at the Suffolk Chamber of Commerce, highlighting the growing pessimism among the county's business community.

It could be so much better, says Attwells Solicitors CEO Nick Attwell

For Nick Attwell, CEO of Attwells Solicitors , the property sector's challenges epitomise the broader investment paralysis:

Opinion

The New Year should be a time of excitement and growth plans, but from my conversations with many local SMEs, confidence is fragile, and investment decisions are on hold for now.

The imminent increase in national insurance means employers are faced with a tax on jobs and need to think hard about what to do on wage rises or new hires this year.

The proposed cuts to the Apprenticeship Levy mean the number of opportunities for young people will be limited, and it need not be so.

The government sets the tone, and local business leaders want to hear a much more pro-business voice and then action, encouraging local entrepreneurs to continue to invest and grow the jobs in Suffolk that we know we can.

Attwell also notes that with stubbornly high borrowing rates and rising Stamp Duty Land Tax, many businesses are reluctant to commit to property investments. This hesitancy is reflected in the Chamber's data, showing significant declines in capital investment across sectors – down 21 percentage points for manufacturers and 17 percentage points for service firms.

Amidst the challenges lies opportunities for small businesses, says RSZ Accountancy Director Nick Hampton

The impact of recent tax changes is creating a two-tier effect across Suffolk's business landscape, according to Nick Hampton, Director of RSZ Accountancy. "A big company is going to be massively affected by the National Insurance increase, with Marks and Spencer reporting an expected £60m additional taxes," he explains, citing M&S Chief Executive Stuart Machine.

However, smaller businesses might find some silver linings, particularly with the increase in Employment Allowance from £5,000 to £10,500.

Hampton illustrates this with a practical example: "A business employing four staff on £25,000 per annum would have been paying approximately £3,800 per annum in Employers National Insurance after allowances, but will now be paying £1,500."

He also raises the opportunity for small businesses to increase prices:

Opinion

Whilst it's always going to be unpopular to increase your prices to your customers, the public has seen through mass media that they should expect price hikes for most things they buy, so it's a good time to do so, as everyone else will be.

Tough times for employers of part-time staff, says Funeral Director David Button

On the front lines of small business operations, David Button of David Button Funeral Directors  represents many service sector firms grappling with increased employment costs.

Opinion

We employ mainly part-time staff, so the reduction in the threshold for employer NI contributions will come into effect for the majority of our employees.

We pay our staff above the minimum wage but the increase in the National Minimum Wage means that we need to reassess our pay structure accordingly.

The changes mean we have to continue to regularly monitor our business performance and margins without always being able to pass these on to families to remain competitive.

The changes the government has made, particularly in relation to employee costs, impacts small businesses at an already difficult time.

While the service sector has seen some welcome quarter-on-quarter improvements in domestic and overseas sales and orders, net balances remain in negative territory.

The manufacturing sector faces particularly challenging conditions, with the survey revealing declines across almost every measurement except export sales, which saw an encouraging eight percentage point increase. However, domestic sales have declined by 22 percentage points, while investment in training has contracted by a concerning 39 percentage points. Most concerning is the 49-percentage point drop in confidence, pushing Suffolk's manufacturing sentiment to its lowest point in two years.

The need for strategic infrastructure investment in Suffolk

Looking ahead, the Chamber is advocating for strategic infrastructure investments to boost regional competitiveness. "The Suffolk Convention identified the key countywide economic priority as investment in the Ely and Haughley rail junctions," explains Simon, emphasising how such improvements could enhance decarbonised rail freight capacities from local ports.

Despite the challenges, Suffolk's business community maintains its characteristic resilience. As Attwell notes, "Suffolk businesspeople are a careful and resilient lot and will weather economic conditions and negative policy."

However, he, like many others, calls for a stronger pro-business voice from the government, accompanied by concrete action to encourage local entrepreneurship and investment.

The bottom line

The message from Suffolk's business leaders is clear: while they're prepared to navigate through current challenges, the mounting tax burden risks stifling growth and investment at a crucial time for the economy.

With the Chamber's survey showing business confidence at concerning levels, the call for government support - particularly through infrastructure investment and tax relief - has never been more urgent.

Attwells Solicitors

An award-winning local law firm. Attwells is rated as "Excellent" on Review Solicitors and holds an impressive 4.8/5 on Feefo.

David Button Independent Funeral Directors

An independent funeral directors that covers Felixstowe, Ipswich and the surrounding areas.

RSZ Accountancy

RSZ Accountancy provides digital accountancy and bookkeeping services that save SMEs time and tax.