Shona Godefroy, managing partner of Westcotts Chartered Accountants and Business Advisers, looks at whether Devon is well positioned to cope with the challenging economic climate.
We’re used to weathering all kinds of storms here in Devon, but the turmoil created by economic changes recently have been challenging for even the most resilient among us.
Businesses everywhere, in every sector, are facing tough times because of staff shortages, increasing energy costs, falling footfall and more.
It would be easy to get bogged down by the gloom. But this region is good at positive thinking and we’re seeing some real rays of hope on the horizon.
Many of our clients are adapting and diversifying. Not only are our businesses responding to the economic headwinds facing them, but thinking differently about their approach.
One sector which has suffered significantly is hospitality and tourism. This economic backbone of our region is facing recruitment problems, minimum wage rises, inflationary food and drink supplies, and other overheads. Despite this, there’s plenty of resilience and many key operators remain positive about the upcoming holiday season.
Agriculture is another crucial sector here. Many farmers and producers are worried about rising prices of fertiliser and fluctuating grain supply affected by the war in Ukraine.
In schools, energy costs have increased dramatically – the education sector is experiencing unheard-of pressures from the cost-of-living.
The extra £4.6 billion over two years in state school funding pledged by the chancellor in November offers some comfort in the long term, but help is needed now.
There are some more positive steps being introduced. Hiring out sporting facilities, introducing on-site cafes, renting out parking spaces during school holidays, and offering catering before and after school are just a few of the more strategic diversification steps being taken. Education can’t be compromised and there is a willingness to do whatever it takes to make sure this sector can negotiate any economic obstacles in the way.
We can’t talk about Devon’s economy without mentioning retail. There is no doubt that this sector has probably been hardest hit by the current financial climate. The fact that customers generally have less money to spend because of reduced real wages and higher interest rates. In addition, rail strikes have affected footfall, particularly over the crucial Christmas period. It’s a perfect storm for a sector already under pressure from online retailers.
Once again, though, there’s an air of optimism as we head into spring. Retailers know that better weather brings out the crowds and we have the propensity to make hay while the sun shines.
All in all, there’s a lot to be optimistic about. Economic climates can change and there are early signs that brighter times are ahead, as long as we all do our bit to support our local industries.
Businesses in Devon have shown they’re trying their best to not only survive but thrive. It’s a good lesson for us all.
Shona Godefroy is the managing partner of Westcotts Chartered Accountants and Business Advisers www.westcotts.uk