Supply chain pressures and reductions in spending are the biggest challenges facing South West businesses in the year ahead, new research has revealed.
Customers cutting back is a concern for 38% of regional companies, according to the survey by business advisory firm BDO, while more than a quarter said delayed materials and a lack of supply continue to hinder business.
BDO’s bi-monthly Economic Engine survey questioned 500 mid-sized businesses with a turnover of between £10m-£300m.
David Brookes, regional managing partner at BDO in the South West, said: “Political and economic headwinds have continued to create a difficult trading environment for many regional businesses in 2024. However, with inflationary pressures stabilising and interest rates starting to reduce, the focus for the year ahead will be on addressing those challenges and focusing on where growth can be delivered.”
Despite the challenges facing South West firms, more than half (56%) said they were in a stronger position compared to the start of the Covid-19 pandemic five years ago. Of those questioned, 38% said they were planning to invest between £3m-£5.5m over the next two to five years in order to scale their business.
Mr Brookes added: “There’s no doubt that the Autumn Budget has added an additional layer of pressure for many businesses; however, what it has done is provide a degree of certainty about how the UK economy will look in the coming years.
“Based on this foundation, companies intend to focus investment on adopting new technologies and upskilling staff in areas such as artificial intelligence and automation. For some, focusing on product innovation and streamlining processes is a top priority, with making supply chains more resilient also an investment intention in the coming years.”
Nearly a third of regional businesses (32%) are looking to develop specific roles as they move towards greater adoption of technology to drive genuine productivity gains, BDO added.
Like this story? Why not sign up to get all the latest business news straight to your inbox