Business Insights And Impact On The UK Economy - 21 November 2024

21st November 2024

Approximately one in six (16%) trading businesses reported that their turnover had increased in October 2024 compared with September 2024, broadly stable with the previous month. In contrast, 22% reported that their turnover had decreased from September 2024, with 23% citing economic uncertainty as a challenge.

More than one in five (22%) trading businesses reported that they expect their turnover to decrease in December 2024, up 6 percentage points from expectations for November 2024; meanwhile 50% of businesses reported that they expect turnover to stay the same, down 7 percentage points over the same period.​

Approximately one in seven (15%) trading businesses with 10 or more employees reported that they expect to raise the prices of goods or services they sell in December 2024, with 39% citing labour costs as a reason for considering doing so; these percentages are up 4 and 9 percentage points, respectively from November 2024.

In early November 2024, 8% of all businesses and 18% of businesses with 10 or more employees reported that they were experiencing worker shortages; both figures are broadly stable with early October 2024.

Looking ahead to December 2024, over three in five (61%) businesses have some form of concern for their business, broadly stable from November 2024; the most reported main concern was falling demand of goods and services (16%), however, there was a 4 percentage point rise from November 2024 in the proportion of businesses that reported that their main concern was taxation (14%).

Approximately one in seven (14%) trading businesses reported they expect their overall performance to decrease over the next 12 months, with this proportion trending upwards since July 2024 (9%); meanwhile 43% of trading businesses reported they expect their overall performance to stay the same over the next 12 months, with this proportion trending downwards since July 2024 (49%).

Approximately one in five (22%) trading businesses reported a decrease in turnover in October 2024 compared with September 2024, broadly stable with September 2024 but a fall of 3 percentage points since August 2024.

Conversely, 16% of businesses reported that their turnover had increased from the previous calendar month, while 53% of businesses reported that their turnover had stayed the same, both broadly stable with September 2024.

The industry with the highest proportion of businesses reporting a decrease in turnover was the accommodation and food service activities industry (35%), although this industry saw a fall of 9 percentage points from September 2024. The industry with the next highest proportion reporting a decrease was the other service activities industry (which includes hairdressing and repair of goods and equipment) at 30%.

The industry with the highest proportion of businesses reporting an increase in turnover was the manufacturing industry (34%), which saw a rise of 14 percentage points from September 2024.

Turnover challenges
In early November 2024, 57% of businesses reported that they were experiencing turnover challenges, broadly stable from early October 2024.

The most reported challenges having an impact on turnover were:

economic uncertainty (23%), broadly stable with early October 2024
competition (19%), broadly stable with early October 2024
cost of labour (18%), up 4 percentage points from early October 2024.

The proportion of businesses experiencing turnover challenges in the accommodation and food service activities industry was significantly higher than the other industries at 81%, although this was broadly stable compared with early October 2024.

For this industry, the three most reported challenges were:

cost of materials (44%), up 5 percentage points from early October 2024.

cost of labour (36%), broadly stable with early October 2024
competition (29%), broadly stable with early October 2024.

Price expectations and price raising factors
Businesses not permanently stopped trading were asked about their expectations for the prices of goods or services they sell and what factors were causing their business to consider raising prices in December 2024.

When asked in early November 2024, 15% of trading businesses with 10 or more employees reported that they expect the prices of goods or services they sell to rise in December 2024, up 4 percentage points from expectations for November 2024. The proportion of businesses that expect their prices to stay the same was 67%, while the proportion that expected prices to decrease was 2%, down 3 percentage points and broadly stable, respectively from expectations for November 2024.

Trading businesses with 10 or more employees were also asked which, if any, factors were causing them to consider raising prices in December 2024. For businesses with 10 or more employees, the top reasons reported for doing so were:

labour costs (39%), up 9 percentage points from November 2024

energy prices (20%), broadly stable with November 2024

raw material prices (16%), broadly stable with November 2024

Several businesses that reported labour costs were a concern commented they would be affected by increases in employer National Insurance contributions (NICs).

It should be noted that 42% of businesses with 10 or more employees were not considering raising prices, which is down 5 percentage points from November 2024.

Worker shortages
Less than a fifth (18%) of businesses with 10 or more employees reported that they were experiencing worker shortages in early November 2024, while 18% reported in October 2024 that they were experiencing difficulties around recruiting employees. Both percentages were broadly stable compared with the previous reporting periods, but decreased 3 and 5 percentage points, respectively, compared with a year ago.

When asked in early November 2024, the industries with the highest proportion of businesses with 10 or more employees experiencing worker shortages were:

the human health and social work activities industry (29%)

the other service activities industry (29%)

the transportation and storage industry (28%)

The industries with the highest proportion of businesses with 10 or more employees that experienced recruitment difficulties during October 2024 were:

the other service activities industry (34%)

the transportation and storage industry (29%)

the human health and social work activities industry (29%)

This indicates that for October 2024, businesses with 10 or more employees in these specific industries were experiencing both the highest level of worker shortages, and the greatest difficulty in recruiting for these roles.

Read more details at the ONS report HERE