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Kent firms planning to put up prices at highest level for six years says Kent Invicta Chamber study

By Chris Price

The prospect of rising inflation has led to a huge rise in the number of Kent companies planning to put up prices.

While the weaker pound has boosted exports, it has also increased import costs, with many firms in the county planning to pass on the hikes to consumers.

A massive 38% of bosses across the county said they would put up prices, the highest figure for nearly six years, according to the Kent Invicta Chamber quarterly economic survey.

Kent Community Foundation has launched a £1.6m loan fund
Kent Community Foundation has launched a £1.6m loan fund

By contrast, only 1% said there were plans to lower prices, indicating price wars may be coming to an end as businesses prepare for a bumpy period while the UK negotiates its exit from the European Union.

Despite this, confidence about future turnover reached its highest point in more than a year in the last three months of 2016.

Nearly three in five Kent bosses in the county expect turnover to increase over the next year, the highest since the third quarter of 2015.

Only 11% expect the figure to decrease, its lowest level since the same period.

The number of companies planning to put up prices is the highest for six years
The number of companies planning to put up prices is the highest for six years

Profit expectations over the next 12 months recovered at the end of last year, with 48% anticipating an increase, up six points.

However, concerns over cashflow have crept into the findings.

Only one in four said their situation had improved in the fourth quarter, compared to 24% in the previous three months.

Those figures are at their lowest levels for three-and-a-half years. The percentage of the survey’s 189 respondents saying their cashflow situation had worsened was up two points to 23%.

Nearly three in five bosses expect turnover to increase over the next year
Nearly three in five bosses expect turnover to increase over the next year
Profit expectations have recovered after a fall in the third quarter of 2016
Profit expectations have recovered after a fall in the third quarter of 2016
The percentage of firms saying cashflow has improved is at its lowest level for three and a half years
The percentage of firms saying cashflow has improved is at its lowest level for three and a half years

Nevertheless, more than half (52%) said cashflow pressures remained constant.

Kent Invicta Chamber’s report said: “Confidence strengthened slightly, albeit profit expectations remain weaker than for turnover.

“Cashflow has been volatile in the past year or so but respondents no longer report the acute cashflow pressures of the first post-crash years. Nonetheless, with almost as many reporting worsened as improved cashflow, Kent’s economy can’t be described as buoyant.”

It continued: “With imported inflation due to the weaker pound, hardly anybody is planning to reduce prices. Turnover expectations may be reverting towards their traditional pattern, with six in 10 improving.

“However, given the imported inflation, this pattern is not quite as reassuring as it appears.”


More from Kent Invicta Chamber of Commerce's quarterly economic survey:

UK and foreign sales stabilised for Kent firms in the fourth quarter of 2016

Plans to hire new staff set to slow in Kent as bosses continue to struggle to find good applicants

Investment plans slow at Kent firms in last quarter of 2016

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