Island businesses face mounting cost pressures as staff shortages and weak demand bite, according to a the official quarterly check-up on the health of Jersey’s economy.

Published this morning, the latest Business Tendency Survey from Statistics Jersey shows that labour and input costs remain stubbornly high, workloads are softening in many sectors, and firms are increasingly cutting costs or re-pricing services to cope.

Skills and capacity issues

54% of businesses said staff and skill shortages were limiting growth.

That figure jumped to 70% among firms already operating at full capacity, underlining the scale of the recruitment challenge.

51% of under-loaded businesses reported a lack of demand as their biggest limitation.

48% of firms facing constraints said they are reducing operational costs or actively considering doing so, while a similar share are adjusting pricing or service offerings to stay competitive.

“Moderately negative”

Overall, business leaders in Jersey were “moderately negative” about current activity in their respective fields last month.

Finance firms reported that conditions were mostly neutral, but more than half of non-finance businesses surveyed reported being under strain, and overall activity in sectors such as hospitality and construction was moderately negative.

Reflecting on the latest results, Chamber chief executive Murray Norton said: “While there are positive signs in the survey, such as steady expectations for the months ahead, the recovery remains uneven. Some sectors are showing resilience, while others are still struggling with costs, skills shortages and supply constraints.”

“Government must act to restore confidence through clear and consistent policy, supporting workforce development and cutting red tape. If we can address these challenges, Jersey can turn stabilisation into sustainable growth,” he continued.

An “important barometer”

Budget cuts meant that the survey was stopped in September 2024, but Chamber welcomed its reinstatement today, calling it an “important barometer of business sentiment”.

“We are pleased to see this survey reinstated, as it provides vital insight into how businesses are coping and what support they need,” commented Chamber President Lee Madden.

“It is encouraging to note signs of stabilisation in sentiment after a difficult few years. However, the findings make it clear that rising costs and recruitment challenges remain the biggest concerns for many Jersey businesses. Companies want to invest and grow, but higher costs and a shortage of skilled labour are making that increasingly difficult.”

He added: “Many firms are unable to pass on cost increases to customers, meaning profitability is being squeezed. This is particularly evident in retail, hospitality and construction. We need policy measures that help manage inflationary pressures and reduce administrative burdens so that businesses can focus on growth.”

Find the full report here.