Currently, 55% view their own operations as performing positively or very positively. Their outlook for the coming 12 months has developed in line with these figures, suggesting that overall companies are managing the current challenges well. For these reasons, one third of companies plan to increase their investment and an even higher share (46%) expect to employ more staff.
Assessing the development of the UK economy as a whole, firms still take a much more cautious view: only 23% expect the UK economy to perform better over the coming twelve months, with 37% expecting it to perform worse.
The shortage of skills, partly as a result of the new immigration rules, is the largest challenge for companies with other administrative hurdles as a result of Brexit ranking second. Concerns around energy costs are still high up on the agenda, but the supply chains pressures on businesses seem to be easing, creating less cause for concern than a year ago. It appears to be more important for businesses to develop new markets than to adjust supply chains.
The recently concluded Windsor Framework is generally expected to lead to some improvement in the economic and political relationship between the EU and the UK, but only few (2%) expect it to have any significant effect on their business activities in the UK.
With regard to long term geopolitical challenges, inflationary pressures are expected to continue to be an issue in the years to come. This is followed by political “interference” and cyber security threats. Somewhat unexpectedly, only around 20% view climate change as a major geopolitical challenge.
