Supply chain disruption remains one of the biggest challenges facing Midlands businesses, as companies gear up for end of year trading.
According to BDO LLP’s bi-monthly Economic Engine survey of 500 mid-market businesses, more than a quarter of Midlands companies (29%) have ranked supply chain pressures as one of their top challenges, with issues such as folding suppliers, stock shortages, and rising costs topping the list.
The survey by the accountancy and business advisory firm found that along with supply chain issues, companies are still worried about energy bills, with 65% of businesses in the Midlands more concerned about rising energy costs this year than they were last year.
Kyla Bellingall, Head of BDO in the Midlands, said: “The economic landscape remains fraught with difficulties for Midlands businesses, as they continue to grapple with supply chain, customer spending, and business cost issues.
“While we have seen positive progress on inflation, with the Bank of England responding in turn, the pace of change is not enough for many, with other external factors exacerbating the problems being faced by businesses.
“As a result, many are calling on the Government for more support in areas such as accessing new talent, support to enable them to invest in new technology, and more specific measures around improvements to the business banking market. Clearly more needs to be done in the eyes of Midlands businesses.”
However, despite the pressures being faced by regional companies, businesses have a firm eye on priorities for the next six months, as they attempt to readdress the balance. According to BDO’s Economic Engine survey, a third of Midlands businesses intend to invest in efficiency, such as automation and AI, 29% are focusing on onshoring more or all of their supply chain, while 25% plan to manage price rises by passing on the cost to customers.
Midlands businesses are also taking a proactive approach to recruitment over the next six months, with 35% investing in more diverse hiring practices, such as apprenticeships and targeting different schools and universities. What’s more, a quarter of companies (25%) are offering additional benefits to attract new recruits, including permanent remote working, subsidised travel, and childcare vouchers.
Bellingall added: “Time and again we see so many examples of businesses across the region refusing to lie down and be beaten by the bruising economic headwinds. Unsurprisingly, more than a quarter of Midlands companies (27%) feel confident about the current business and economic environment and have a solid strategy in place to overcome challenges and future-proof their business.
“There’s little doubt that this approach will be crucial in the months to come as companies contend with ongoing pressures, with many looking at specific initiatives around attracting the younger generation into the workplace and responding to new channels opening across various sectors.”
