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

Why it matters: The latest Quarterly Economic Survey (QES) results paint a concerning picture of Suffolk's economy, with manufacturers particularly hard hit and service companies experiencing volatile trading conditions.

The big picture: While service companies saw some improvements in domestic and overseas trade, most indicators remain in negative territory. Manufacturers faced worrying declines across nearly all measurements, with only export sales showing an increase of eight percentage points.

By the numbers:

• More than 80% of businesses are worried about business tax levels – double the number from last year
• 40% identified inflation as a concern – the lowest since Q2 2021
• Manufacturing domestic sales are down 22 percentage points
• Manufacturing confidence in profitability is down 49 percentage points, hitting its lowest point in two years

Investment outlook: Suffolk's decline outpaces the wider East of England region, and local companies are significantly pulling back on growth plans:

• Manufacturing investment in plant and machinery is down 21 percentage points
• Service sector investment is down 17 percentage points
• Training investment dropped 39 percentage points for manufacturers

Jobs impact: Despite more than half of businesses trying to recruit between October and December, overall employment numbers are becoming more fragile. With stagnant growth and falling profitability confidence, recruitment pressures could increase.

What they're saying: Paul Simon, head of public affairs at Suffolk Chamber, warns that "local growth and confidence seem to be in danger of leaking away." He emphasises that "there must be no further tax hikes on businesses during this Parliament" and argues that "the tax take from business needs to be progressively reduced."

Chamber's solutions: The Chamber is pushing for key infrastructure investments, including:

• Improvements to Ely and Haughley rail junctions to boost decarbonised rail freight
• Enhanced strategic road networks, especially the A14 and Orwell Bridge
• Better 5G coverage
• Improved water supply infrastructure for the county's land-based economy

Bottom line: With business taxes now overshadowing traditional concerns like inflation, Suffolk Chamber argues that immediate infrastructure investment and tax reduction are essential to restore business confidence and boost regional competitiveness.