Falling sales and declining profits are increasingly being reported by Yorkshire businesses

The Chamber’s latest Quarterly Economic Survey shows that the region’s firm are still being impacted by sky high overheads, specifically from taxation and labour costs, putting a dampener on expectations around revenues and profits.

And, with the Autumn Budget due on November 26, the Chamber is warning of negative consequences for the economy if further levels of taxation are imposed on employers.

There are some crumbs of comfort to be found to be found in the report however, with employers showing a slight increase in hiring intent, as well as an improved appetite to invest in upskilling their existing workforces.

Mark Casci, head of policy and representation at West & North Yorkshire Chamber of Commerce, said: “Given the significant challenges facing the region’s business community of late, it is sadly unsurprising to see such a gloomy picture emerging.

“As a Chamber we have been warning for more than a year about the deleterious impact that last year’s Budget tax hikes would have on our members.

“The proof is now being shown in these latest figures which show a slowdown in sales, most notably overseas, and profits.

“The Treasury must now understand in the strongest terms that any further increases in taxation on employers will only serve to further weaken the economy.”

David Bharier, Head of Research at the British Chambers of Commerce, said: “Ahead of the Chancellor’s statement next month, our survey shows many firms remain bruised and are not ready for another Budget battering. The research reveals no clear improvements to key indicators we track. For twelve months, SMEs have told us the same story: rising costs, weak investment, and little sense of relief on the horizon. 

 “The Employer NICs increase has been the most widely cited source of pressure, hitting investment and pushing up prices. The proportion of businesses expecting to raise prices remains worryingly high, driven primarily by labour costs. Inflation now sits alongside taxation as a top concern. The global shift towards protectionism and tariffs has also been a major compounding factor.  

“Persistent weak sentiment this quarter may suggest that many firms have already priced in a tough Budget. But further surprise measures that hit business, like those seen in 2024, could drive confidence even lower.  

“What businesses need now is certainty and a long-term strategy, not more ad hoc policy shifts. The AI revolution could be a real productivity game changer and our recent research shows that more SMEs are adopting it, but firms need the space to invest and adapt if the UK is to seize the opportunity.  

“Our message to the Chancellor ahead of the Budget is clear – no further tax rises on business. SMEs are calling for urgent action to tackle skills shortages, a bold push to boost exports, and more investment in infrastructure. Without that, confidence could deteriorate further, putting economic growth at risk”.