NI contribution rise linked to sharp fall in local employment
Employment growth in North Wales has fallen to a record low outside the Covid-19 pandemic, new research from the West Cheshire & North Wales Chamber of Commerce shows.
The Chamber’s Quarterly Business Report for Q2 2025 found just 21 per cent of businesses surveyed between May 12 and June 9 reported increased employment in the previous three months.
Among employers trying to recruit, 75 per cent said they faced difficulties, highlighting ongoing challenges in the local labour market.
Maria Davison, Skills & Policy Director at the Chamber, said the results reflect the impact of recent National Insurance (NI) contribution changes and rising National Living Wage costs on businesses.
“In our Quarterly Business Report after the Autumn Statement, business confidence and investment plans fell substantially whilst concerns around corporation tax (which includes NI) rose to its highest level on record,” she said.
“Members surveyed directly cite that changes to NI contributions and National Living Wage increases have impacted their recruitment and investment plans. With further changes coming in the form of the Employment Rights Bill, businesses are entering a new employment landscape marked by structurally higher labour costs and administrative requirements.”
The report also found that business confidence, turnover, and profitability declined in Q2, while cashflow remained tight with only 20 per cent of firms reporting improvement.
However, sales and orders showed some recovery after a previous dip, but investment plans for equipment and training continued to fall, following a two-year downward trend.
Maria Davison added: “There have been many challenges for businesses in the first six months of 2025, both at home and abroad, and business sentiment in Q2 remains subdued, following last Autumn’s tax increase announcements and the more recent introduction of global tariffs.
“The series of long-term strategies from Government in recent weeks have been welcomed, but businesses are clear – they want their costs reduced, regulation reformed, and skills barriers removed.”
Carlton Relf, managing director of Wrexham-based cleaning firm Maidscando, said his business faced rising operating costs including a 13 per cent increase in employment costs due to NI and wage hikes.
“We’re a growing business but we are having to look at making further operating efficiencies or re-evaluate our pricing strategies,” he said. “The lasting nature of these challenging trading conditions underscores the need for practical business support measures to ease the pressure on our region’s companies.”
The Chamber has invited businesses experiencing labour market challenges to get in touch for support.
For more information and to read the full Quarterly Business Report, visit the West Cheshire & North Wales Chamber of Commerce website.
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