THE outlook for Barnsley businesses’ long-term futures remains ‘precarious’ due to inflation and the government’s budget - as a quarter of firms said their financial positions have already worsened.
Barnsley and Rotherham Chamber of Commerce research - carried out through a survey - warned that although more than half of respondents said they felt more optimistic about the future, just a third said their cashflow position had improved during the past three months, while 23 per cent said their financial position had worsened.
The survey also revealed that businesses have adopted a cautious approach to raising finance as a means of driving business growth.
Despite 58 per cent of companies reporting that they are working below capacity, 70 per cent of businesses said they were not currently looking at ways of raising finance.
A total of 25 per cent of businesses said they felt it would be unlikely that they would be successful in securing finance, with 83 per cent likely to approach their bank in the first instance.
However, less than a third were aware of alternative funding providers operating in the region.
According to data published by the South Yorkshire Mayoral Combined Authority (SYMCA), local businesses lag behind many areas of the UK, resulting in lower productivity and economic growth.
Matthew Stephens, president, Barnsley and Rotherham Chamber, said: “It’s clear from the findings of the survey that although business confidence has increased slightly since our last survey, many businesses continue to work below capacity.
“The data indicates that many businesses are delaying investment decisions, possibly in expectation of lower interest rates, as well as understanding how decisions taken during the budget will impact their future plans.
“Access to finance can play a vital role in unlocking business potential, as well as acting as a catalyst towards driving growth and job creation.
“With just 36 per cent of businesses reporting increases in cashflow, it’s clear that many are waiting to see how the Chancellor’s budget announcements are likely to impact their business before committing to any major new investment plans.”
Chancellor Rachel Reeves raised taxes by £40bn, including an increase in National Insurance contributions for employers from April.
She also announced a rise in the minimum wage by 6.7 per cent to £12.21 for those over 21, while 18 to 20 year olds would see hourly wages go up from £8.60 to £10, ‘significantly’ impacting businesses’ finances.
Carrie Sudbury, chief executive of the Barnsley and Rotherham Chamber, added: “The budget will see the highest level of tax rises imposed by a government in a generation.
“The increase in National Insurance contributions will leave many businesses facing difficult decisions, particularly when it comes to employee recruitment and retention.
“Raising this for employers isn’t just a tax on working people by stealth, it’s a tax on innovation, entrepreneurship and aspiration.
“I would have liked to have seen the Chancellor do more to address the inherent regional inequality Britain faces, particularly when it comes to tackling the skills and productivity challenges many businesses across South Yorkshire faces.
“I am pleased to see that some provision has been made to protect the millions of SME businesses and self-employed workers across the UK.
“However, for many companies, saddled with the double whammy of an additional tax bill of £615 per employee, coupled with inflationary salary increases, it is highly likely that such costs will be passed directly in the form of price rises.”
