Cornwall’s Quarterly Economic Survey: While there are emerging signs of stronger demand among Cornwall businesses, rising costs and ongoing uncertainty continue to constrain confidence and investment.

The Q4 2025 Cornwall Quarterly Economic Survey gives grounds for cautious optimism around improving demand conditions, alongside persistent pressures that continue to limit confidence and investment. Businesses report signs of strengthening in UK-facing activity, with the balance of opinion on domestic sales rising to +20%, up from just +2% in Q3. Advance UK orders show a similar uplift, from a modest +4% to +17%, pointing to a more positive short-term pipeline.

This apparent strengthening in activity is also reflected in cash flow, where the balance improved from +4% to +17%, and in forward-looking turnover expectations: two-thirds of firms now anticipate higher revenues over the next 12 months, compared with just over half in Q3. However, this improvement in top-line expectations is not translating fully into profit confidence. Profitability expectations appear more subdued, suggesting that rising costs are absorbing much of the benefit of increased demand.

This is likely to dampen investment intentions, which remain cautious and selective. While training and R&D intentions indicate some improvement, investment in plant and equipment has weakened further, indicating limited appetite for large-scale capital expansion (noting that the Cornwall survey is dominated by service-sector businesses, so national QES results may provide a fuller benchmark).

Workforce indicators point to modest employment growth and stronger hiring intentions, but recruitment difficulties remain widespread, underscoring persistent labour market frictions.

Cost pressures remain the dominant concern. More than eight in ten businesses report being under pressure to raise prices, driven primarily by labour costs, utilities and overheads. Almost all firms cite external business concerns, with taxation and inflation most frequently highlighted. Expected price inflation remains elevated, reinforcing the squeeze on margins.  Overall, the survey points to an economy showing signs of momentum, but still costrained by costs, capacity and uncertainty.