East Mids businesses expect a decrease in employment, profitability and investment following Autumn Budget

Half of East Midlands businesses plan to revise their recruitment intentions, 6 out of 10 anticipate a drop in profit and just under half are likely to lower investment plans – these are key findings from a snap survey carried out by East Midlands Chamber into the impact of measures announced in the Chancellor’s Autumn Budget on 30th October.

Most respondents – 8 out 10 - expressed a negative overall impression of the Autumn Budget, citing significant concerns over increased costs and a lack of targeted support for small and medium enterprises (SMEs).

239 businesses across Nottinghamshire, Derbyshire and Leicestershire participated in the research, which sought to discover sentiment, growth projections and overall confidence level among firms across the East Midlands following the Budget.

Sectors that participated in the survey included manufacturing, construction, retail, hospitality, transport & logistics, professional services, and the public sector through health and education.

The findings have been presented to political leaders at both regional and national level.

Summary of findings from the Chamber’s snap survey on the impact of the Autumn Budget in the East Midlands 2024

• 8 out of 10 have a negative impression of the Budget 
• Half plan to reduce recruitment
• 4 out of 10 expect to reduce their staff number
• 6 out of 10 expect profitability to decrease
• 44% plan to reduce investment plans over the next 12 months
• 4 out of 10 expect sales to increase. 2 out of 10 expect sales to fall

East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “With increased NI contributions, reduction in the secondary threshold and the national minimum wage increasing, businesses are anticipating significant increases in operational costs - that really shows in this research. For small and medium enterprises, this burden is particularly challenging and could impact their ability to sustain workforce levels. 

"Respondents anticipated reducing their staffing level, particularly in labour-intensive sectors such as hospitality and retail, while a hesitancy to invest in workforce development could impact skills growth and productivity. Many businesses feel they need to prioritise immediate financial stability over training.

“Over half of respondents indicated they could pull back on recruitment plans, reflecting the cautious approach businesses are adopting due to cost increases. This trend could limit job creation in the East Midlands.  Many businesses expect profitability to decline over the next year, with respondents citing the combined pressure of higher wages, tax burdens and operating costs as barriers to maintaining profit margins.

“While this research shows some optimism with sales - 4 out of 10 expect sales to increase - what stands out is the sizeable portion of East Midlands businesses ready to consider cutting back on capital investment, staffing levels and recruitment plans, in the light of rising operational costs and economic uncertainty.

“These findings underline the need for supportive policies that address both the social and economic challenges facing East Midlands businesses. We have put the results of this survey to political leaders at both regional and national level, urging them to consider the insights and advocate for policy adjustments that will enable East Midlands businesses to thrive amidst the challenges posed by the Autumn Budget.”