Research from insurance company Aviva, unveil the top risks facing UK businesses in 2023.
Following their survey of over 1,200 business owners and senior decision makers, respondents were asked to describe key risks to their operations this year.
Key insights from the survey, reveal that:
- Economic concerns top Aviva’s risk index, as net business confidence in the UK economy plummets
- 45% of companies reported a supply chain impact on their business; 38% have experienced significantly higher supply chain costs
- 58% of businesses have struggled to hire new employees, with a quarter of companies having to increase pay to attract or retain staff
- 63% of businesses said the cost-of-living crisis is a concern, and 29% of companies believe it will have a ‘serious’ impact on their business
- 57% of businesses said they would be unlikely to survive beyond a year if energy costs were to increase by between five to 10 times, unless prices come down quickly
Business Challenges in 2023
Addressing the key issues UK-based businesses have been facing and contextualising the challenging conditions that have been ever present for entrepreneurs in recent years, Adam Winslow, CEO for UK & Ireland General Insurance at Aviva, said: “In last year’s report we warned businesses to brace themselves for economic uncertainty, particularly around supply chain issues and the UK’s ability to trade in a post-Brexit world.
“Despite early optimism and a post-Covid-19 bounce-back, our bleak forecast has come to fruition, with 2022 proving to be a difficult year economically for companies across the country.
“Supply chain issues dominant in 2021 have been exacerbated this year, principally by the war in Ukraine, but also by residual questions around the impacts of Brexit.
“Businesses are continuing to struggle to find new export markets, while the impacts of soaring inflation and workforce shortages have constrained the UK’s economic recovery from its pandemic hangover.
“Over the course of 2022, cost pressures for businesses have evolved into a full-blown cost of living crisis across the UK economy, driven by systemic inflation and soaring energy prices, which have been impacted by the war in Ukraine combined with enduring post-Brexit and post-Covid-19 pressures.
“The crisis is impacting individuals, communities and the companies they work for in different ways, from increasing supply costs for companies and reducing consumption by customers to creating financial stress at large. Collins Dictionary’s word of the year for 2022 was ‘permacrisis’ – an extended period of instability and insecurity, resulting from a series of catastrophic events – which perhaps encapsulates the current operating environment for UK businesses.”
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