WORKER shortages and inflation pressures are putting Wiltshire's economic recovery at risk.

More than 250 companies took part in Business West’s survey of business conditions in the south west and the results made for grim reading.

Prices continued to rise in the third quarter of 2021, with a third of respondents reporting that they have had to increase their prices due to rising input costs.

Most of the manufacturers quizzed said they were under pressure to raise prices as a result of the soaring costs of raw materials and more than half expressed alarm at the increasing cost of imports.

Rising inflation looks like a trend that is set to continue, with half of respondents expecting to increase prices in the next 3 months. This rises to 62 per cent of respondents in the manufacturing industries.

Labour shortages are having a widespread detrimental impact - slowing business activity across the region. Around 60 per cent of respondents had tried to recruit in the last 3 months, and three-quarters of these said that they had experienced difficulties finding the right candidates.

This is the highest percentage of businesses facing difficulties in the last four years – only followed by Q4 2018, when 71 per cent of business recruiting said they faced difficulties finding suitable staff.

A Wiltshire farm shop and café owner said: “We have two chef jobs with no applicants to running from April onwards. No suitable applicants for waiting staff and shop floor staff either,” they commented anonymously."

Emma Carter of Smarter Media in Swindon said: “We have four roles currently available. There is a lack of candidates and those that are applying have none of the skills required. This is an industry wide problem and as a result, we are seeing significant increases in salaries, which only bigger/corporate companies can accommodate.”

Although retail, leisure and hospitality are clearly affected, labour shortages are hitting the broader services sector hard, with 77 per cent of service sector businesses reporting recruitment difficulties. These figures suggest the problem is only getting worse.

Skilled manual or technical (50%) and semi or unskilled roles (46%) are reported to be the most difficult roles to fill.

Due to the unique set of challenges businesses are facing right now, business confidence has stabilised after peaking following the reopening earlier this year. There are a number of growth hurdles to overcome in the short, medium and long term but 37 per cent of respondents said that they feel confident or very confident of the prospects of the UK economy for the next year and 60 per cent are feeling confident or very confident in their own business’ potential over the same period.

Business West managing director Phil Smith said: “The third quarter of the year maintains the positive outlook from quarter two, albeit with more moderate results. Businesses in the south west are on the path to economic recovery. Nevertheless, this is not without a set of complex challenges that must be addressed, such as labour market misalignments, skills shortages, inflationary pressures and trade constraints.”