Despite the challenging economic climate with double-digit inflation, the latest National Hair & Beauty Federation (NHBF) Quarterly State of the Industry Survey demonstrates a positive change in the industry that we previously saw in spring/summer 2022.
More businesses report making a small or good profit (43%), 38% of businesses are breaking even, and fewer businesses (19%) report making a small or substantial loss.
Meanwhile, the general trend towards increasing prices is slowing. Over the previous three months, 64% of businesses raised their prices. A further 51% will do so over the next three months.
Energy costs are still at the top of business’ concerns in terms of impact of the business (80%). The NHBF has already presented the detail of these findings to Ofgem, the regulator, to feed into their review of the non-domestic energy market and report to Government in the summer.
The increased cost of trade supplies and increases to National Minimum Wage/National Living Wage (NMW/NLW) are the next two major concerns for business owners. In response, businesses are removing non-essential expenditure, increasing prices and continuing to hold off taking on staff/apprentices. In fact, 23% have cut back on apprentices and similar to the autumn, only 15% (up from 9% in January) were definitely or likely to take on apprentices in the next three months. However, 21% of respondents were definitely or likely to take on new staff in the next three months, up from 15% in January.
Reliance on external support has eased back to levels seen in spring/summer 2022; now only over half of businesses (58%) are either partially or completely reliant on Government support – down from 71% in January.
Business survival expectations have improved and are in line with a more positive outlook seen in July 2022. Two thirds (64%, up from 49% in January) are now confident of their survival. Nevertheless, the number of businesses who are not sure whether they will survive over the next six months is still significant at a third.
Growth intentions have improved and are back in line with spring/summer 2022, with 41% (up from 30% in January) saying that they intend to grow their business either rapidly or moderately. Similar numbers of businesses intend to remain the same size (41%), and 19% are planning to downsize or handover the business (down from 25% in January).
Richard Lambert, Chief Executive of the NHBF says: “Overall, this latest NHBF State of the Industry survey is showing a more positive feeling in general and improvement for most of the industry.
“Hopefully the announcement of a rise in funding for the Apprenticeship Standards will encourage more employers to change their mind about recruiting junior staff, and we will start to see more young people come into the industry – plus this will help businesses to grow.
“As an organisation we will continue to use this vital information to help inform our work with government for their planning on issues that directly affect our industry.”