We asked businesses about a number of potential issues that may challenge them in 2023
Challenges in 2023 will include further economic disruption and continued inflation, knock on effects of costs of business such as energy prices and pay rates, and other issues requiring attention, such as cyber security. Our Business Pulse captured the views of businesses across the UK on the challenges they face in 2023 across these issues.
A third of businesses say their plans to reduce carbon emissions and support the country’s drive to Net Zero have changed given the challenging economic climate. Over half of these businesses say the scale of their plans have declined, rather than getting rid of the plans entirely.
A quarter of businesses still intend to proceed with their plans to reduce carbon emissions, while a similar proportion say they didn’t have plans to reduce carbon emissions in the first place. Plans differ by types of businesses, with those in the financial sector finding it easier to keep to their plans than those in manufacturing or infrastructure.
Businesses, much like individual households, have seen significant rises in energy prices in 2022. When businesses were asked what actions they had already taken in response to energy price rises, 85% have already taken at least one action. The most commonly stated action was to ‘reduce their own energy consumption’, followed by ‘absorbing costs’ and ‘raising prices’, both stated by around a third of businesses. Businesses were much less likely to say they had taken actions related to reducing carbon emissions or moving to more environmentally friendly energy solutions.
The cost of living crisis and inflation rates is a source of significant pressure on business' cost of running. We asked businesses what they think will happen to pay in their organisation in the next 12 months, with only 4% of businesses saying they will increase pay to their employees by 10% or more - i.e. somewhat in line with inflation rates - in the next 12 months. A further 21% said pay will increase between 5% and 9%, though a majority of businesses expect pay to either stay the same (34%) or increase by up to 5% (33%). Medium and small sized businesses are more likely to say they will increase pay compared with micro businesses.
We also asked businesses about a issue separate to their running costs and the financial pressures on them. Cyber security is a significant issue for business, with nine in ten (88%) saying they are concerned about cyber security to some degree or more.
The main concern seems to be ‘virus, ransomware and other malicious software’, but around half of businesses are also concerned about unauthorized access to either their systems and records or their bank accounts.
Levels of concern related to software and malicious attacks and links are generally higher among businesses in the financial sector than other industries.
