Key points

  • This paper summarises the key themes from our recent business visits.
  • Firms are generally positive about demand. Any pessimism is driven mainly by uncertainty about the future of the broader business landscape.
  • Labour is in short supply and labour costs are rising because of minimum wage increases and related pass-through to other wage brackets.
  • Firms want to invest but are holding back due to high levels of policy uncertainty and capacity constraints.
  • Increasing costs cannot be passed on to prices because of high competition, related to increased price transparency and low imported inflation, and fixed-price contracts.

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