GC SITUATION REPORT AND BUSINESS SURVEY RESULTS

The latest survey results highlight the current state of business confidence, investment intentions, and operational challenges across various sectors. The GC Business Confidence Index (GC-BCI), which measures businesses' confidence in their growth prospects, dropped at 7.2 out of 10, lower from the previous few months. Confidence levels are highest confidence in Energy & Environment, Engineering, Green-Tech, Professional Services, and Construction, and lowest in Manufacturing, Tourism, Logistics.

Sales remains same, with 16% of businesses reporting increase in sales, and 61% anticipating profit growth in the coming year, lower than previous quarter by 2%. Investment intentions dropped from 41% to 38%. DCTs, Manufacturing, Green-Tech, and Business & Financial Services
are the sectors most likely to increase cap-ex spending overall. 22% of firms plan to increase investment in workforce development, a decline from the previous level of 29%. The sectors with the highest interest in workforce development investment include DCTs, Business, Financial & Professional Services, and Manufacturing.

Rising costs, cashflow issues, and supply chain disruptions continue to pose significant challenges. However, many firms, particularly those in Creative Digital Technologies, Manufacturing, Business, Financial, and Professional Services (BFPS), and Healthcare, have sufficient cash reserves to weather these difficulties.

Access to new domestic sales opportunities remains a top challenge, especially in DCTs, Manufacturing, Business, Financial & Professional Services, Green Tech, and Education sectors. Businesses are also seeking support in areas which remains broadly similar with innovation,
business planning, marketing, workforce development, financial advice, and environmental impact. Smaller firms face more pronounced challenges in domestic sales, product development, business model adaptation, financial management, and digital adoption.

Key Findings

GC Business Confidence Index (GC-BCI): remains at 7.2 out of 10, a slight decrease from last quarter’s 7.3, indicating a modest dip in confidence over recent months. Confidence levels are above average for organizations within Green-Tech, Retail & Wholesale, Business, Financial & Professional Services, and Construction. The lowest confidence is seen in Manufacturing, Tourism, Logistics, and Education sectors.

Sales and Profits: 16% of firms reported an increase in sales, slightly down from last quarter (17%). 61% expect profits to increase in the year ahead, a small decrease from the last few months (63%). 3% expect profits to decrease, remaining consistent with previous levels (3%). The sectors most optimistic about profitability increases are DCTs, Business, Financial & Professional Services, and Manufacturing

Investment: 38% of firms expect to increase capital expenditure (cap-ex) in the year ahead, down from 41% last quarter. DCTs, Manufacturing, Green-Tech, and Business & Financial Services are the sectors most likely to increase cap-ex spending overall. 22% of firms plan to increase investment in workforce development, a decline from the previous level of 29%. The sectors with the highest interest in workforce development investment include DCTs, Business, Financial & Professional Services, and Manufacturing.

Cashflow Issues: 15% of firms report cashflow problems, with micro-size firms (<10 employees) being the most affected. Sectors with the highest cashflow risks include within DCTs, Hospitality, Manufacturing.

Trade: 21% of firms (vs 20%) currently export goods or services, and 14% are expanding into new markets, a trend particularly notable in the DCTs and Manufacturing sectors, with lower activity reported in other sectors. Additionally, 11% of firms engaged in overseas trade are looking to expand in their current markets, consistent with previous data.

Future Support Needs: Key support priorities business planning at 31% (vs 34%), innovation at 31% (vs 33%), marketing at 31% (up from 32%), workforce development and skills at 22% (vs 25%), and financial advice at 21% (vs 23%) while 15% (vs 14%) require assistance with
environmental impact.

Recruitment and Skills: 24% of firms (vs 25%) are currently recruiting new staff, with recruitment rates higher among SMEs than other businesses. By sector, recruitment is more active in DCTs, Manufacturing, Business, Financial & Professional Services, and Health & Social Care while Retail and Engineering sectors are the least likely to be recruiting.