Cambridge businesses regroup as 2025’s challenges loom large
Corporate employment in the East of England is better than the national average, thanks to growth in knowledge-intensive technology and services – but 2025 will be challenging, say local employers and financial experts.
New results from the Centre for Business Research (CBR) portray a picture of continued but slightly lower overall corporate employment growth in the Greater Cambridge area.
The research was produced by the CBR at the University of Cambridge and sponsored by a collaboration between the Greater Cambridge Partnership and Cambridge Ahead.
Jobs growth was driven by knowledge intensive services (up 11.8 per cent), information technology and telecoms (up 6.7 per cent) plus high-tech manufacturing (up 5.9 per cent).
Life sciences and healthcare, which didn’t perform as fast as reported in the comparable timeframe in 2022-23, still grew at 5.6 per cent – significantly above the national average.
Dan Thorp, chief executive at Cambridge Ahead, said: “Greater Cambridge is extremely well-positioned for continued growth and innovation, driven by its thriving knowledge economy and deeply entrepreneurial spirit.”
The immediate concern is that growth slowed from 6.3 per cent in 2022-23 to 5.3 per cent in 2023-24, suggesting that the UK recession in the third and fourth quarters of 2023 had some impact on business.
New research from leading business and financial adviser Grant Thornton UK LLP finds that, following the increases announced in the Autumn Budget to employer National Insurance contributions and National Minimum Wage, UK businesses’ profit growth expectations remain low and many will implement hiring freezes.
The research surveyed 800 UK businesses in December 2024. Over half (52 per cent) of the businesses surveyed anticipate that they will have to reduce hiring or cut jobs and offer reduced or no pay increases and bonuses to their employees, due to the increasing cost burden. Two thirds (66 per cent) plan to review their employee benefits.
“The changes to employer’s National Insurance contributions and the National Minimum Wage announced in the Budget have hit businesses hard across the board – but particularly small to medium-sized businesses,” said Schellion Horn, head of economic consulting, Grant Thornton UK LLP.
The Cambridgeshire Chambers of Commerce was even more direct. “Business confidence crumbles in the wake of the Autumn Budget”, concluded the networking group – which represents 60,023 businesses and 238,600 employees in the county – after publishing details of its latest Quarterly Economic Survey (QES). The main concerns are increased taxation, stagnant recruitment activity, and rising costs.
Charlotte Horobin, CEO of Cambridgeshire Chambers of Commerce, said: “The knock to business confidence following the Autumn Budget is clear.
“Taxation is a noticeable concern for the business community, alongside increasing costs to employment.
“Early signs show that investment is already being hindered, and recruitment has come to a halt. Without urgent government action to ease the pain on businesses, the challenging economic landscape will get worse before it gets better.”
Finally, the just-published new NatWest Tracker data for the East of England found private sector output of goods and services in the East of England decreased for the second month running in December. The end of 2024 also saw “the fastest net decline in workforce numbers in over four years”, said the NatWest report.
