UK businesses concerned by cost of bad weather
The number of small businesses who have voiced concerns over the impact of extreme weather on their operations has doubled in the past 12 months, new research shows.
According to Hitachi Capital, businesses that operate in seasonal sectors are particularly worried, as they only have a limited period of time to work in and can ill‐afford to lose more to the weather.
The influence of bad weather has hit the economy hard in the first four months of 2018, to a point where many firms now list it as their primary concern.
Of all industries, the agricultural sector is a specific area of concern, as 46% of firms in the sector report that unpredictable weather has had a negative impact on their operations.
The proportion of companies that report that the weather is limiting their business has fluctuated, rising from 37% two years ago and from 34% in the first quarter.
Concerns in the hospitality sector have more than doubled in the last two years, surging from 13% in 2016 to 28% in the last quarter.
Businesses in both sectors now list poor weather as their main concern, placing it ahead of issues such as market uncertainty and operational costs.
Concern over weather in the construction industry has also risen since 2016, as 13% of firms report that it has disrupted activity, up from 9% two years ago.
A similar situation was noted in the retail sector, where a 4% jump from 2016 means that 12% of firms now view poor weather as a major cause for concern.
Analysts estimate that the impact o the ‘Beast from the East’ weather system may have cost the economy more than £1 billion per day earlier in 2018.
The impacts are particularly profound among small businesses that operate on tight budgets, as they can struggle to recover from losing revenue or business opportunities as a result of adverse weather conditions.
Alternative finance options can provide a short‐term solution for firms facing financial difficulties, while other firms may want to undertake options reviews to assess their situation and find a suitable strategy.
The key for any struggling firms is to act promptly, as it increases the number of potential solutions that might be available, be that entering into administration, finding a means of refinancing or restructuring operations.
By Phil Smith