The Office for National Statistics’ Business Insights & Conditions Survey published 18 September 2025 reveals a worrying mood among trading firms. Only 12% of businesses reported turnover gains in August vs July—down from prior months—while 28% reported declines.

Looking ahead, 16% expect turnover contraction in October, balancing those expecting increase. Economic uncertainty was reported by 28% of firms as the top challenge.

These figures come at a time when labour costs are flagged by 36% of businesses with 10+ employees as a principal constraint—among the most stable pressure points over the summer months.

Interpreting the Signals

• Disparity between input and output inflation: 23% of firms saw price rises in goods bought in August, but only 9% saw them in goods sold. This margin squeeze is acute.
• Competition intensifies: 22% cited competition as a rising challenge—higher than in previous months.
• Labour shortages: 18% of larger employers report worker shortages, consistent with earlier months.
• For many firms, the outlook is stagnant: expectations for sales growth are roughly flat across the board.

What Businesses Should Do This Month

• Segment turnover risk: Identify which products or clients are most vulnerable to demand dips (e.g. discretionary, export-facing, price-sensitive lines).
• Tighten cost control in non-revenue-driving areas: Travel, marketing, discretionary spend—all should be scrutinised.
• Use price architecture carefully: In sectors with pricing power, incremental increases may cushion margin slippage.
• Strengthen customer retention: Aggressive follow-up, customer loyalty incentives and contract renewals become more valuable in soft demand.
• Manage labour costs and flexibility: Use mixed shifts, temp staffing, cross-training to absorb fluctuations.

Role of Accountancy Support

• Use monthly turnover variance reports vs budget/forecast to spot early trends.
• Create a “decline scenario tool” that simulates 5–10% revenue drop across lines.
• Margin reallocation: focus resources on core, resilient lines over fringe products.

Bottom line

The ONS survey confirms what many business owners already feel: turnover is under pressure, input costs rising and demand brittle. October will test which firms are agile enough to ride out the turbulence.

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