More UK businesses reported falling turnover in August as labour costs remained the most commonly cited pressure among larger employers and concern about energy prices increased during September.
The latest Business Insights and Conditions Survey from the Office for National Statistics found that 28% of trading businesses said turnover had decreased in August compared with the previous month, up six percentage points from July.
Among businesses employing 10 or more people, 31% reported lower turnover, an increase of seven percentage points month on month.
Both figures were broadly similar to August 2025, meaning the deterioration from July does not on its own establish a new year-on-year downturn. It does show that trading conditions weakened during the month for a sizeable proportion of respondents.
Economic uncertainty remained the most commonly reported challenge affecting turnover across trading businesses, cited by 29%. For organisations with at least 10 employees, labour costs were the largest pressure, reported by 37%.
The labour-cost figure was broadly stable against both August 2026 and September 2025, suggesting employment expenses remain a persistent rather than newly emerging constraint.
Expectations for October were subdued. Seventeen per cent of trading businesses expected turnover to fall, compared with 15% anticipating an increase. Both measures were broadly unchanged from expectations for September and from the equivalent period a year earlier.
Input-price pressure was more pronounced than the prices businesses were able or willing to charge customers. Twenty-nine per cent said the prices of goods and services they bought increased during August, up six percentage points compared with a year earlier.
By contrast, 11% reported higher selling prices, broadly unchanged from both July and August 2025.
The gap can pressure margins where companies are unable to pass higher costs through to customers. Its effect differs substantially by sector, depending on competition, contractual pricing, consumer demand, labour intensity, and the proportion of costs represented by imported inputs or energy.
More businesses expect to attempt price increases in October. Seventeen per cent said they anticipated raising the prices of goods and services sold, three percentage points higher than the expectation for September and seven points above October 2025.
Construction recorded the strongest pricing expectation, with 32% of businesses in the sector expecting to increase selling prices. The ONS said that was the highest proportion for construction since February 2023.
Energy has also returned as a more visible business concern. In early September, 64% of businesses expressed some degree of concern about energy prices, an increase of five percentage points from late August.
The ONS said respondents cited the conflict in the Middle East as one reason for the increase. Accommodation and food-service businesses were particularly exposed, with 90% reporting concern about energy prices.
Hospitality companies typically combine several costs that are difficult to reduce quickly. Labour represents a large share of expenditure, energy use is relatively intensive, and businesses often have limited pricing flexibility where consumers are already sensitive to accommodation, food, or leisure prices.
The survey therefore shows several pressures interacting rather than one constraint dominating across the economy. Employment costs are most prominent among larger businesses, uncertainty affects companies of all sizes, input prices remain elevated for many respondents, and renewed energy concern adds another potential cost risk.
The Business Insights and Conditions Survey was open from 7 to 20 September and received 10,256 responses from a sample of 38,579 businesses, equivalent to a 26.6% response rate.
It covers private-sector businesses across a wide range of industries but excludes some sectors, including agriculture, energy generation and supply, finance and insurance, public administration, and publicly provided education and health.
The ONS classifies the figures as official statistics in development and advises caution in interpretation. The survey is voluntary, and its questions are adjusted over time to reflect changing economic conditions.
For management teams, temporary monthly weakness and persistent cost pressure require different responses. A one-month decline in turnover can reverse as demand changes, while labour, energy, or supplier costs embedded in the operating model can require more structural action around staffing, procurement, automation, pricing, or investment.
The September survey suggests caution rather than a uniform downturn. Most companies continue to trade, and the proportions expecting higher or lower turnover next month remain relatively close. The combination of weaker August turnover, persistent labour costs, rising input prices, and greater concern over energy nevertheless leaves operating margins exposed even without a sharp deterioration in headline economic activity.
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