Impact of NI contributions on business in North Wales
The report, based on responses from 90 firms between May 12 and June 9, also reveals that of those employers that attempted to recruit, 75% encountered difficulties, further highlighting the challenges that businesses are encountering in the labour market.
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Skills & Policy Director at the West Cheshire & North Wales Chamber of Commerce, Maria Davison, said: "In our Quarterly Business Report after the Autumn Statement, business confidence and investment plans fell substantially whilst concerns around corporation tax (which includes NI) rose to its highest level on record. This pointed to a challenging time ahead for business and our report for Q2 of 2025 is now showing the real impact of the announcements that were made.
"Members surveyed directly cite that changes to NI contributions and National Living Wage increases have impacted their recruitment and investment plans. With further changes coming in the form of the Employment Rights Bill, businesses are entering a new employment landscape marked by structurally higher labour costs and administrative requirements.
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"We are keen to speak to businesses that are experiencing challenges in the labour market so please do reach out via 01244 669988 or info@wcnwchamber.org.uk."
Elsewhere in the Quarterly Business Report for Quarter 2 of 2025:
• Business confidence has been trending downwards since record highs in Q3 2023 with turnover and profitability both dipping this quarter.
• Cashflow remains tight with only 20% of firms reporting an increase in the last quarter.
• Sales and Orders, both domestic and overseas, showed signs of recovery after a dip last quarter.
• Investment plans, for both plant & machinery and training, have continued the same downward trend that we have seen for the last two years.
Maria added: "There have been many challenges for businesses in the first six months of 2025, both at home and abroad, and business sentiment in Q2 remains subdued, following last Autumn's tax increase announcements and the more recent introduction of global tariffs.
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"The series of long-term strategies from Government in recent weeks have been welcomed, but businesses are clear - they want their costs reduced, regulation reformed, and skills barriers removed. Action by policymakers now, will improve confidence and give firms the tools to boost growth."
Members of the Chamber of Commerce have given their feedback on the current economic climate.
Carlton Relf, managing director of Wrexham-based commercial cleaning contractor Maidscando, said: "Our business has seen rising operating costs, particularly the NI and National Living Wage increases - alongside rising inflation - which have undermined our financial performance. Like other market sectors particularly reliant on part-time and entry level job roles, our employment costs have risen by up to 13%.
"We're a growing business but we are having to look at making further operating efficiencies or re-evaluate our pricing strategies. The lasting nature of these challenging trading conditions underscores the need for practical business support measures to ease the pressure on our region's companies."
• To read the full Quarterly Business Report, visit the West Cheshire & North Wales Chamber of Commerce website: https://wcnwchamber.org.uk/voice-of-business/quarterly-business-report/.
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