87% of small business owners fear inflation will affect growth in 2022
New data has revealed that 87% of owner-managed businesses fear that inflation will impede their growth rate in 2022. Of those 87%, 23.88% feared that inflation would impede their business growth “to a great extent”.
The data, taken from a survey of 335 businesses conducted by the association of practising accountants (APA), also found that 64% of SMEs (small-medium enterprises) are finding it difficult to deliver their services as a result of the rise in energy costs, as the energy price cap increased by £693 on April 1.
One of the respondents commented “Energy prices are crippling us… we have many challenges ahead this year. I would be surprised if we make a profit this year.”
The survey also investigated staff recruitment and retention, with 59% of SMEs reporting that they are finding recruitment and retention more challenging than it was 12 months ago, while just 3% are finding this less of a challenge.
Brexit has also greatly impacted the operation of UK businesses, with 43% of those who took part in the survey stating that Brexit had either had a negative or very negative impact on their business, compared to just 4% who reported a positive impact.
Brexit could also be part of the reason businesses are struggling with recruitment, with one participant saying, “Not being able to bring skilled workers from outside the UK due to Brexit rules [is challenging].”
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The survey also shed insight into how businesses are coping as a result of the pandemic, with 81% of owner-managed businesses reporting that they are in better shape for the future than before the pandemic, and 79% stating they think that, overall, the UK Government response to Covid has been either very or quite effective.
Martin Muirhead, chairman of the APA, commented, “Having navigated Brexit and the pandemic, owner-managed businesses are now confronted with the double challenge of rising inflation and increased energy costs.
“Many of these businesses have done well to survive the last two years. Having looked forward to a period of economic stability post-Covid they are confronted with the opposite.
“It is imperative that the UK Government take a more realistic view of our future trading relations with Europe recognising that labour shortages coupled with an altogether more challenging export environment pose a real threat to recovery.”
Has inflation had a significant impact on your business? Let us know in the comments…