Jersey is too expensive - say businesses not customers

Thursday 10 July 2014

The cost of operating in Jersey is one the biggest problems facing local businesses, according to the latest States figures. The issue is mainly affecting the health of businesses outside of the finance sector, in which 36% report that their profitability has dropped in the last quarter.

Overall, the latest States Business Tendency Survey shows increasing optimism, and higher levels of activity in the local economy. In the finance sector, 59% of businesses who responded, reported that they were busier over the last three months than they were before; and 42% of them were more profitable over the same period.

However, that picture is very different in the 'non-finance' sectors. Here, firms in general report that they are a little busier, but their operating costs, and so their profitability, are causing real problems. 

Looking specifically at the construction sector, more than half of the businesses who responded (51%), reported that they were now less profitable than they were three months ago. The situation is similar in wholesale and retail, with one third of respondents saying that their profitability had fallen over the same period. 

The wholesale and retail businesses who responded mainly said that they hadn't taken on any more staff in the last three months (79%), and even more (81%) said that they weren't likely to do so in the next quarter. It is a similar picture in construction, with 67% of respondents saying they hadn't employed more people recently, and 76% saying that wasn't going to change in the near future.

Those statistics will be concerning for the States who are trying to encourage businesses in those sectors to employ more people, as a way of bringing down the numbers of Islanders who are currently out of a job.