What challenges do Norfolk and Suffolk face in 2023?

Less than eight weeks later, however, Putin ordered Russian troops into Ukraine.

This started a devastating war that led to horrific suffering for the Ukrainian people. 

It also resulted in the price of gas and oil soaring, pushing inflation to levels not seen in decades. 

The war in Ukraine has been devastating for the Ukrainian people (Image: PA Wire)

Business owners had already been facing numerous challenges before the war - inflation was rising due to economies re-starting after lockdowns and the 'great resignation' had led to firms dealing with staff shortages. 

A tough year

Paul Simon, from the Suffolk Chamber of Commerce, explained that 2022 was the year that the "economic consequences of global issues fully impacted Suffolk's business community". 

He added: “The Covid-19 pandemic contributed to the growing labour shortage, just as the war in Ukraine added fuel to the inflationary fire that was already raging at the start of the year, albeit largely under the radar of the Bank of England, whose earlier zombie monetary policy was later reversed in a frenzy of interest rate rises.

Paul Simon from the Suffolk Chamber of Commerce (Image: Paul Simon/Nicky West)

“These combined to present some profoundly challenging situations for businesses, with Suffolk Chamber survey after survey showing pronounced declines in core metrics such as cashflow, profitability, and investment."

Along with international pressures, companies across the region were also affected by domestic policies. 

“Some of these trading headwinds were also domestic own goals," said Mr Simon. 

"The political instability at Westminster, and resultant flip-flopping on fiscal issues such as the decision on Corporation Tax increases and failure to deliver the promised full review of the perverse and outdated business rates system, has made it harder for businesses to outline and pilot their growth plans except over the short-term.

"Ongoing uncertainty as to whether Suffolk will get its fair share of investment in road, rail, 5G and EV infrastructure, especially along the A14 growth corridor, is another frustrating blockage to Suffolk being able to boost its own and the nation’s prosperity."

Candy Richards, from the Federation of Small Businesses (FSB), described 2022 as "one of the toughest trading years that many have experienced". 

She added that "spiralling inflation and energy costs" were "pushing small firms to the brink". 

Candy Richards from the Federation of Small Businesses (Image: Candy Richards)

For some companies, the economic situation has been too difficult to navigate, especially after struggling through the pandemic, leading to closures across industries. 

In October, a Norwich-based insolvency specialists McTear Williams and Woods released research suggesting that there is a pent-up demand in firms filing for insolvency and could see higher numbers going out of business during the next 12 months. 

The year ahead

There is no doubt that 2023 is going to be a tough year for the region's businesses, but many are already adapting to meet the challenges. 

“Once again, the last 12 months has demonstrated the tremendous resilience and resourcefulness of the Suffolk business community, with many accounts among our members of new product lines launched, new markets secured, and new ways of working pioneered," said Mr Simon. 

"Suffolk Chamber believes that the challenges of 2023 could be outweighed by the opportunities, including those associated with Sizewell C and other capital projects, plus in the medium-term the impact of the Suffolk devolution deal, as long as the voice of business is given appropriate weight, giving the county more control over infrastructure and skills investment decisions.

“As the stakes get higher, Suffolk Chamber has invested in its policy-making and lobbying capacity and is well-prepared to work alongside businesses to deliver the changes needed to give Suffolk firms the tools to do the job.”

Ms Richards said: "Small businesses across the region are looking towards 2023 with trepidation."

She added: "[businesses] will be hoping that the new year will see a new resolution from the government to back business and commit to creating a climate for growth.

"One of the most immediate actions that the government must take is a commitment to continue supporting small businesses with their energy costs.

"At FSB, our research shows that one in four small firms (24pc) plan to close, downsize or restructure if energy relief comes to a sharp end in April next year.

"With small businesses delivering 50pc of UK turnover and providing jobs for around 60pc of the working population, this would be disastrous for our local economy and communities."

Ms Richards states that small firms in the region need additional help from the government to see them through the next 12 months.  

"Alongside the stealth tax rises in the autumn statement and the slashing of research and development tax credits, the recent news that government is scrapping the Help to Grow Digital scheme comes as a bitter blow to small businesses looking to upskill and scale," she said. 

Business owners are hoping chancellor Jeremy Hunt will provide more support for small firms (Image: Parliament TV)

"They will now be wondering where the stimulus for digital productivity will come from next year.

"Another area that small businesses hope will be addressed in 2023 is the challenge of late payments.

"The government must take urgent action to improve cashflow for vast numbers of small firms by tackling poor payment practices in supply chains, which would come at no cost to taxpayers.

"Late payment of invoices – often by bigger businesses to their smaller suppliers – leads to the shutdown of 50,000 businesses a year.

"Over the last three months more than half (54pc) of small firms have been the victim of late payments."

The year ahead may look bleak, but there could be light at the end of the tunnel - many financial experts believe that inflation has already peaked and the recession, although long, could be shallow.