Rising prices and staff shortages having an impact on growth

THE UK’S largest business group is urging the Government to address rising input prices, lack of access to the right staff and trade disruption as research highlights how these trends could stifle a nascent economic recovery.

Among the 1,500 respondents that contributed, close to two thirds say they’re operating costs have risen over the past year.

Four in ten cite inputs such as raw materials as a contributor to the rise, an 11 percentage point increase on the same quarter in 2019. Labour, utilities and fuel were also commonly flagged.

Elsewhere, more than a third of small firms cited access to appropriately skilled staff as a primary barrier to growth over the coming 12 months.

The Office for National Statistics flagged that there were 953,000 job vacancies in the three months to July, a record high.

FSB National chairman and West Midlands businessman Mike Cherry said: “Small firms are emerging from lockdowns under the strain of spiralling input and shipping costs, skills shortages, new exporting paperwork, emergency debt repayments, rent accruals and business rates. The Government should urgently move to mitigate cost pressures by reducing Employer NICS, which are serving as a jobs tax and yet another cost to think about in an environment where finding the right people is a nightmare. This Government was elected on a manifesto that rightly promised to cut the jobs tax, and ministers must rediscover that reformist zeal if they want to unlock growth within the small business sector.”