BUSINESSES in Thames Valley have set out plans to tackle challenges as they begin 2025.
Research from accountancy and business advisory firm BDO LLP collect results from a bi-monthly Economic Engine survey of 500 mid-sized businesses.
Its survey showed that rising operating costs, such as energy bills and the cost of adopting new technologies like artificial intelligence (AI), is an ongoing issue for nearly half of Thames Valley companies, at 47%.
More than a third of Thames Valley mid-sized businesses (35%) reported supply chain challenges were one of their top concerns during the coming year.
Rising operating costs is also a significant challenge for nearly half of Thames Valley companies, at 47%.
More than half of mid-sized businesses–62%–reported feeling they were in a stronger position compared to the start of the COVID-19 pandemic five years ago.
David Brookes, regional managing partner at BDO in the Thames Valley, commented: “Political and economic headwinds have continued to create a difficult trading environment for many regional businesses in 2024.
“However, with inflationary pressures stabilising and interest rates starting to reduce, the focus for the year ahead will be on addressing those challenges and focusing on where growth can be delivered.
“Undoubtedly, this will result in recruitment strategies being adjusted, with more than a third of Thames Valley businesses (35%) planning to hire more non-permanent staff and apprentices to minimise the impact of higher labour cost.
“For more than a quarter, greater financial support will be required to cover additional overheads, with nearly one-fifth of regional businesses looking to develop specific roles as they move towards greater adoption of technology to drive genuine productivity gains.”
He explained: “There’s no doubt that the Autumn Budget has added an additional layer of pressure for many businesses; however, what it has done is provide a degree of certainty about how the UK economy will look in the coming years.
“Based on this foundation, companies intend to focus investment on adopting new technologies and upskilling staff in areas such as artificial intelligence and automation.
“For some, this extends to advanced equipment and machinery, with hiring staff with specialist skills to help grow the business also a top investment intention in the coming years.”
He added: “Investing in new technologies like AI and automation is clearly a significant priority for regional businesses, whether it’s driven by improving customer service, or making supply chains more efficient.
“One thing is very clear, central government needs to throw its weight behind mid-sized businesses – the engine of our regional economy – if these businesses are going to succeed and that can only be achieved by introducing policy and taxation that supports their strategic ambitions.”
