Cornwall businesses continue to report steady sales growth and active recruitment, but persistent cost pressures and uncertainty around future demand are continuing to constrain confidence and investment.

The Q3 2026 Cornwall Quarterly Economic Survey suggests that Cornwall businesses have experienced another relatively stable quarter, with positive sales performance, ongoing recruitment activity and generally optimistic expectations for turnover. However, cost pressures remain widespread, and there is little evidence of a significant easing in the challenges facing many businesses.

Domestic trading conditions remain positive. More than a third of businesses (35%) report increased UK sales and bookings over the past three months, compared with 12% reporting a decline. This is consistent with the broadly positive picture seen in recent surveys and suggests that many firms continue to experience healthy levels of demand.

UK orders and advance bookings also remain positive overall, with more businesses reporting growth than decline. However, compared with Q2, the results appear somewhat less strong, suggesting that firms remain cautious about the strength of demand over the coming months. Given the smaller survey sample this quarter, any comparison should be treated with appropriate caution, but there is little evidence of a substantial strengthening in future order books.

Business expectations remain broadly positive. Over half of respondents (59%) expect turnover to increase over the next twelve months, while only 10% expect a decline. Expectations for profitability are also positive overall, although the majority of businesses expect profitability to remain broadly unchanged rather than improve significantly. Taken together, the results suggest a business community that remains cautiously optimistic but far from buoyant.

Investment intentions continue to present a mixed picture. There are some indications that businesses are maintaining or modestly increasing investment in equipment, research and development, and workforce training. Training investment appears particularly resilient, with more businesses reporting increases than decreases. However, the differences from recent quarters are relatively modest and do not point to any marked change in investment behaviour.

Around 46% of businesses report operating at full capacity, while just over half remain below capacity. This is broadly consistent with the pattern seen over the past year and suggests that many firms still have scope to accommodate additional demand without major expansion.

Labour market findings remain one of the more positive aspects of the survey. More than a third of businesses (35%) report increasing their workforce during the quarter, compared with 10% reporting a reduction. Recruitment activity also remains relatively high, with over half of businesses attempting to recruit staff. While recruitment difficulties continue to affect around half of recruiting firms, the results suggest that employers may be finding it somewhat easier to recruit than earlier in the year. Professional and managerial roles remain the most difficult vacancies to fill.

Cost pressures remain firmly embedded within the business environment. A net 85% of respondents report pressure to raise prices (and about half of all businesses say they expect to raise prices within the next three months), whilst 88% identify external business concerns. Labour costs continue to be the most frequently cited source of pressure, followed by utilities, fuel and other overheads. Inflation remains the leading concern among businesses, while taxation continues to feature prominently. These findings indicate that improvements in trading performance are still being offset by rising operating costs.

Additional Local Insights: AI, Energy Costs and Renewables

This quarter’s additional questions explored business use of artificial intelligence, energy costs and progress towards renewable or low-carbon energy solutions.

The findings suggest that AI is now widely used across Cornwall businesses. More than three quarters of respondents report some form of AI usage, with informal use by staff being the most common approach. Many businesses have also introduced guidance, policies or training to support its use, while a smaller proportion report that AI has already been integrated into core systems and business processes. Only a small minority report having no plans to use AI.

Current AI applications are concentrated in practical day-to-day activities. Administrative tasks such as meeting notes, transcription and email drafting are the most common uses. Businesses are also using AI to support research, data analysis, reporting and marketing activity. More specialised applications, including software development and customer-facing functions, are present but remain less widespread.

Energy costs continue to be a concern for many firms. Among those able to estimate the change, most businesses report that their energy bills have increased over the past twelve months. The most common experience is a rise of less than 10%, although a significant proportion report increases of between 10% and 25%. Only a small number of businesses report lower energy costs than a year ago.

The survey also indicates considerable interest in renewable and low-carbon energy solutions. More than a quarter of businesses report having already installed measures such as solar PV, heat pumps, battery storage, EV charging infrastructure or green energy tariffs and say these investments are delivering benefits. Others express interest but identify cost, access to capital or property-related constraints as barriers to investment.