Growth is hit by staff shortages and energy costs

STAFF shortages and high energy prices are hitting the prospects for business growth, according to a new report.

Supply chain disruption is also affecting companies across the country, especially manufacturers, said accountancy and business advisory firm BDO LLP.

Staff shortages have been the main driver behind the slowdown in growth in the services sector, said the report.

Kaley Crossthwaite, of BDO LLP, said businesses were facing an increasingly difficult winter, adding: “Between rising inflation and a lack of staff, 2022 could be a difficult year for companies who have been forced to to prioritise short-term problems over long-term growth.

“At the same time, consumers are beginning to see the impact of these shortages, with rising fuel and energy prices, which may in turn lead to cutbacks in discretionary spending.

“In the final months of the year, businesses and consumers alike will be hoping that the economy can find some Christmas spirit over November and December and help take us into the new year on a high.”

It comes after new research suggests three out of four high-street businesses have lost orders or had deliveries delayed because of supply chain issues in the last year.

A survey of 1,000 businesses found that many have also been affected by a shortage of staff because of the pandemic as well as the impact of Brexit regulations.

Four out of five respondents to the poll by risk management and insurance brokerage Gallagher said they were set to simplify their supply chains, with many switching to more localised solutions.

Businesses have turned down customer orders or absorbed increased costs due to a lack of supply driving up prices, said the report.

Neil Hodgson, of Gallagher, said: “Often operating behind the scenes, supply chains have been unusually visible to the public in the past year, with high-profile shortages causing disruption.

“Business leaders clearly see further problems on the horizon and are keen to put the lessons of this year to use and make long-term changes, like looking closer to home for suppliers.”