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MANY LCR FIRMS IN ‘PARALYSIS’ DUE TO ECONOMIC UNCERTAINTY
Economic uncertainty is causing businesses in the Liverpool City Region to hold back from investing or hiring staff, according to the latest Quarterly Economic Survey (QES).
The survey shows taxation remains a growing concern, with 62% of Liverpool City Region firms saying it is more worrying now compared to three months ago, while inflation was highlighted by 54% of respondents.
Nearly half (45%) anticipate raising their prices in the near future, with 90% under pressure to increase prices due to employment costs. Utilities (59%) and raw materials (41%) are also significant cost pressures.
More than two-thirds (81%) expect turnover to improve or stay the same in the next 12 months, yet almost a third (31%) expect profitability to drop, and more than half (52%) believe their business is operating below full capacity. When asked about cashflow, 46% said it had fallen, with investment plans for tech, plant and machinery hardest hit.
Almost half (46%) said export orders and advance agreements have declined, while a similar amount (42%) said export sales have fallen. In contrast, fewer than 25% of respondents said UK sales and orders have dropped, around a third reported an increase, with the remainder reporting no significant change.
60% do not expect to change the size of their workforce, but just 13% expect headcount to fall, reflecting a hesitancy among business owners to make longerterm decisions. Nearly two-thirds have attempted to recruit in the period, with full-time jobs on the agenda for 80% of those respondents, yet 70% encountered difficulties in doing so, with skilled or manual workers accounting for 55% of those challenges.
Local QES data was collected by Chambers of Commerce in Knowsley, Halton and Liverpool.
Paul Cherpeau, chief executive of Liverpool Chamber, said:
“This survey underlines the frustrating reality that many businesses find themselves in a state of paralysis, unable or unwilling to move ahead with growth or investment decisions, understandably concerned about the impact of UK government policy around business taxation and the National Minimum Wage, as well as global factors such as tariffs and conflict.
“The impact of this trading environment can be seen bleeding through into the city region and UK economy, with stagnant GDP growth and lower productivity, while the looming threat of a Budget in November only serves to heighten tensions.
“We urge the government to reassure businesses by bringing forward a sustainable and deliverable long-term plan for economic growth that doesn’t involve any further tax raids on business owners and employers.”
That uncertainty was reflected in some of the narrative responses to the survey. One business owner said:
“We are having lots of sleepless nights. Since the tax and NI changes kicked in in April 2025, the trading environment has become increasingly difficult. Pre-April, with the work we had planned with clients for the rest of the year, we had a projected 60-75% increase in turnover by our year-end in October.
“However, a combination of increased costs and overheads, and clients cutting non-essential aspects of planned projects due to their own increased costs and overheads, means we will end this year with less turnover than last and in deficit. It is only through very savvy decisions and budgeting that the business is still operating.”
Others are concerned over a slowdown in public sector projects damaging their future prospects.
“The outlook remains consistent, but we are still trading on Conservative governmentfunded work in the public sector. Currently Labour government policy suggests that once this runs out, no real opportunities are expected to come to fruition under their present strategy, hence we see increasing our private sector exposure critical to shortmedium term survival - however this is not a great market in the north.”
There was some positive feedback among respondents, one said:
“A very slow start to the year has suddenly turned into a very busy Autumn, with a lot of new opportunities coming along at the same time. Many of these have been in the development pipeline for several years, so the real test will be whether the growth is sustained next year and beyond.”
Quarterly Economic Survey Q3 2025
Business sentiment remains flat ahead of the Budget. The BCC’s Quarterly Economic Survey (QES) for Q3 2025 - the UK’s largest independent survey of business sentiment, made up of 4,669 respondents - shows that most indicators remain unchanged from the previous quarter and are at 2022 levels, with taxation and inflation the top concerns.
Taxation remains the top concern, cited by 59% of respondents
Domestic Sales
The percentage of responding businesses reporting increased domestic sales remains unchanged from last quarter, at 32%.
43% reported no change and 25% reported a decrease. Sectoral breakdowns show increased sales are at their lowest among retailers (21%).
Almost half (44%) of firms expect to rise prices over the next three months
Confidence and investment levels remain at 2022 levels
Overall, 25% of businesses say they have seen decreased investment in machinery and equipment. 54% report no change, while only 21% have increased their plans.
The issue is more marked in certain sectors, with over a third (35%) of hospitality firms scaling back of investment plans. The figure for those in the retail sector is 30%.
