Business West's latest Quarterly Economic Survey (QES) shows recruitment difficulties for the majority of businesses.

The survey, which polls businesses across the South West, reveals 69% had difficulties in recruitment, particularly for skilled manual/ technical and professional/ managerial roles. Despite this, 79% of respondents are looking to recruit full-time positions and 49% for permanent positions.

General economic conditions and business uncertainty remain the top concerns, with 62% and 51% of businesses respectively. Concerns about inflation have eased slightly, but it remains a significant issue for a quarter of respondents.

A significant number of survey comments indicate that political events, such as elections and changes in government policies, are major concerns for businesses. This uncertainty impacts their confidence and planning.

Matt Griffith, director of policy at Business West, said: "These findings underscore the ongoing recruitment challenges and capacity issues faced by businesses. Addressing these concerns is crucial for enhancing productivity and growth in the region. Further focus on skills development and workforce planning could be instrumental in mitigating these challenges.

"The business landscape is grappling with ongoing economic challenges and moderate optimism in specific areas. There is a slight improvement in confidence regarding the UK economy, but businesses still face significant uncertainties and pressures. However, the election outcome, whatever that may be, will at least bring businesses some certainty and a government that will set out an economic strategy for the next five years. This should help our businesses to plan."

Domestic sales remained positive in Q2 with a net balance of 5%, indicating resilience despite broader economic challenges. Manufacturers reported stronger performance compared to businesses in the service sector. The net balance for export sales stood at 1%. Manufacturers show a stronger performance (16%), while services still face challenges (-8%).

The Q2 results reveal a trend towards price stability among businesses, with 61% reporting that their prices remained constant over the past three months. However, 35% of participants increased their prices and 5%reduced them.

Other findings include:

• Confidence in the UK economy shows a modest improvement, with a net balance of -21% (compared to -26% in Q2).

• Profitability forecasts are moderately optimistic, with 46% expecting improvement, but they lag behind turnover expectations (52%).

• Labour costs are the most prominent, affecting 66% of businesses, followed by utilities (46%), raw materials (38%), and fuel (29%).