UK economy latest - your thoughts

ended 11. November 2021

This morning, official data from the ONS showed that UK economic growth slowed between July and September, primarily due to supply chain problems holding back the recovery.

Growth for the three months was just 1.3%, while the economy expanded by 0.6% in September. Newspage sought the views of small business owners around the UK.

11 responses from the Newspage community

Star Quote
"The issues with the supply chain, the increased number of vacancies (especially in hospitality and the delivery/driver areas) are all cause for concern. While much of the latest GDP data is due to the 'Covid bounce', there do seem to be some underlying trends that put the UK economy, in my mind, right on a knife edge at the moment. 2022 could either see a boom in the economy, or another dramatic downward shift similar to the one experienced in 2008. While I'd like to think it's boom, I'm increasingly minded toward bust. Let's not forget the tens of thousands of care workers who suddenly find themselves out of work due to the mandatory vaccines. Whether you think mandatory vaccines are good or bad, 60,000 extra people potentially out of work in the lead up to Christmas makes consumers nervous. I do detect a hesitancy to commit to long term spending across the businesses I deal with. I don't know the answer, but I do know we have a long, hard winter ahead."
Star Quote
"I'm not sure the UK consumer is as strong and confident as these figures suggest. A lot of people across the thousands of businesses we work with are still buying cautiously, which is a real problem. I am optimistic that next year things will start to return to a relative normal but it's a lot slower than it usually is this close to Christmas. For now, the average small UK business is still on red alert."
Star Quote
"The economy isn't feeling great at all for me. Reduced income means tougher times and cut backs for my family. Do I heat the home, feed the family or make sure the kids don't think santa has forgotten them? I have found that some of my clients have been canceling appointments with me due to the rising cost of their energy bills, food and fuel. They just cannot afford to be spending money on Haircuts, Nails, Spray Tans, Massages and other personal beauty with Christmas coming up. This, along with cancellations due to Covid, flu and winter vomiting virus, is a major concern - especially when some people don't even have the decency to cancel or simply don't turn up."
Star Quote
"After speaking daily with many small businesses, it's clear that demand for goods and services is still very high in many sectors. Consumer spending power is strong after 2020 saw record falls in unsecured household lending and savings increase. However businesses face supply chain shortages, increased costs and staff shortages. A "restriction free" winter should help with these issues and see us return to pre-pandemic levels of GDP."
Star Quote
"From time to time our business has been crippled by the supply chain problems the country is facing. Having to gamble on stock levels so far in advance of Christmas has hindered cash flow, which has stopped us proceeding with other capital investments. We now have a real two-way problem for the festive period - on the one hand we are sat on stock we might not sell due to the stock gamble and on the other hand we can't always accept orders as our suppliers are giving us crazy timelines for delivery due to their own supply issues. We're playing a game we can't currently win."
"Supply chain problems are so bad that the UK’s army of temporary workers, the traditional back-stop for businesses in need, cannot meet the demand. The balance of power has changed and is entirely in workers’ favour, even temps who usually have no choice are being increasingly selective about the companies they work for. Money is not always the deciding factor, people want to work with businesses whose ethics and values they agree with, firms that have a positive impact on the wider world. So whilst the economy is in a painful position right now, if it forces businesses to treat all their workers better, particularly temporary workers, then that’s got to be positive."
The stymied economic growth brought on by supply chain issues is the start of the beginning; make no bones about this. The increases in GDP figures resulted from surging house prices, brought about by the stamp duty holiday coupled with the reopening of the economy and a shortage of goods due to, notably, Brexit. However, the main issue is that all the GDP figures and economic data are only on paper; there is no real economic growth; it's all notional and predicated on artificially inflated asset prices. With the US inflation at 6.2%, & about to make its journey across the Atlantic, the spectre of inflation is here and likely to stay. All this coupled with Evergrande's potential default on its bond payment spells trouble; I fear the economic Kracken awakes.
It's not just the supply chain issue, small businesses are being affected by hikes in taxes, skills shortages and growing concern about the winter - we are hurtling towards a rise in the minimum wage following a budget that barely supported mentioned us at all. How are we to be part of the recovery if we are not included in the packages of support...the UK needs its 5.8m small businesses to be an equal partner in the road to recovery
"I'm very frustrated about the economy at the moment. It still needs support from the Government in the form of grants, but instead we are simply being forced to "just get on with it" as if nothing happened. Many people are still afraid to be in crowds, or in one on one situations such as therapies, and they still have to isolate if they have symptoms or if they've been around people with symptoms. This means that my business (and other similar ones) lose customers to being "pinged". Our recovery is very slow indeed and I'm sure that more small businesses will go under before all this is done because, as we have seen before, the Government just don't really care about small businesses and their owners. They are much more caring about their friends and multinational businesses."
"The econmy is bouncing back at varying rates within the different sectors. Luckily, we install electric car chargers and are flying. Business friends in hospitality, though, are struggling and the general feeling is they will not make it. They built up far too much debt during the pandemic."
Here at FreshWipes, we've had more supply chain issues this year than all of the toilet roll manufacturers put together during Covid. Just when we thought nothing else could go wrong with the supply chain, we've now been hit with lengthy delays at Felixstowe (due to massive port congestion) on our body wipes. This year, we've already tackled sea-container prices more than quadrupling, extended shipping times, the Suez canal fiasco, lack of available shipping space and then a shortage of HGV drivers to pick up the containers when they do finally arrive. Ironically, HGV drivers are big users of our biodegradable body wipes! So far, we've tried to absorb many of the extra costs and not pass them on to our customers, but with no sign of things improving until at least Spring 2022, we can't hold our prices forever. It's certainly been an Annus Horribilis for SME's, particularly those that rely on imported goods.