Latest GDP figure revealed tomorrow AM

As a digital marketing agency, we're very lucky to be working in one of the few sectors left that are still growing, but sadly, we are seeing lots of our small business clients facing increasing levels of pressure. Many are struggling with soaring overheads in the form of higher business rates, electricity and heating bills, which means they are simply no longer viable. Digital sectors such as ours that don't need premises are surviving, but many in production or hospitality are sadly having to close their doors, and this includes even those who have operated as successful businesses for decades. It's heartbreaking to see so many years of progress lost for talented, hard-working people, and I fear for many, 2023 is only going to get harder.

The primary challenge facing the proper market is a shortage of skilled labour in construction, which has been exacerbated by Covid and Brexit. This shortage of skilled workforce has led to increased labour costs and longer lead times, resulting in project delays and increased expenses for developers. In addition, we are also grappling with rising material costs. The cost of construction materials such as timber, steel, cement and concrete has surged in recent months due to global supply chain disruptions and increased demand. Meanwhile, ongoing interest rate hikes are causing further inflationary pressures for the sector. Higher interest rates mean greater borrowing costs for developers and property investors, which eventually get passed down to consumers, whether they're buyers or a tenants. Despite the challenges, the sector remains resilient, with demand for rental homes remaining sky-high and new government initiatives such as HTB being introduced.

Sales were below average at the start of the year and it was a really tough time for small businesses. But my own business, and those of other small business owners I know, are now seeing an increase in sales. Customer spending and confidence seem higher than they have been in quite a while. Long may it continue.

Businesses have been crying out for certainty following the impact of recent global events and Liz Truss' turbulent and - thankfully - short-lived spell as PM, and although Sunak and Hunt may not be the most popular people we do seem to have some stability for now.

Whereas the outlook in previous years has been cautiously optimistic, generally speaking, 2023 feels more cautious than optimistic. That said, both of our businesses are showing encouraging signs of growth with several contracts secured from key clients already. Supply disruption has eased, although given how volatile these markets can be I wouldn't bet against further issues later this year.

Cashflow is still a major challenge, with debtor days increasing beyond agreed terms. Quite often - although not exclusively - this stems from big companies dragging their feet on payments, which then has a knock-on effect throughout the supply chain. Whilst this isn't new news, SMEs simply don't have the luxury of being a charity!

Tomorrow's GDP data release is like a loaded gun pointed at the UK economy, and no one knows which way it's going to fire.
As businesses and charities brace themselves for the worst, it's hard not to feel a sense of trepidation about what's to come.
With so many challenges facing the economy right now, from continuing Brexit uncertainty to record rising inflation, it's difficult to see any positives on the horizon. Who knows what impact the introduction of 100% mortgages will also have on the UK economy over the next 6 months?
As we look ahead to the rest of 2023, it's crucial to remain realistic about the challenges that lie ahead and to prepare for the worst-case scenario.
Let's hope for the best, but prepare for the worst - because tomorrow's GDP data release could be the wake-up call that the UK economy needs..

Regardless of what numbers are released this morning by the Government, they are meaningless. The government(s) release so called "statistics" and numbers about the local economy, unemployment, GDP etc, yet these number rarely reflect reality. Reality is measured by the amount of money in a persons pocket, their ability to do business, and to thrive economically. All of these examples are a failure at the moment. I paid over £450 in utilities for our home last month, as we are a VERY energy efficient family. I run a business from home, making skincare and herbal supplements and at this point I cannot afford to run my dehydrators, or magnetic spinners, which means I cannot efficiently run my business. I'm not alone in this as I've spoken with many many other small business owners who are stressing over how they are going to manage to run their businesses while the economy has tanked below 1929 levels. Government GDP numbers are meaningless. Reality is Reality.