A recent report has found that the percentage of businesses reporting increased profitability has remained low and largely static between 2023 and 2025 at around 15%.
The Isle of Man Business Environment and Conditions Survey is a bi-annual survey that investigates the economic and operational environment in which businesses operate.
It seeks to provide an overview of some of the key concerns and expectations of local employers.
Financial Constraints
Inflation and energy prices make up the most common concerns held by businesses on the Isle of Man, followed by falling demand, business rates, and local competition.
Financial constraints and insufficient demand are the two factors that businesses most frequently report as having a negative impact on their operations.
Demand for goods and services was found to have fallen for approximately 22% of businesses over the six months prior to the survey while 19% reported an increase.
The percentage of businesses reporting an increase in demand was found to have dropped since 2024.
Similarly, the percentage of respondents who anticipated demand to increase over the subsequent six months was found to have dropped from nearly 32% to just 20% in 2025.
Turnover
Over 75% of businesses saw turnover remain the same or fall over the previous six months while approximately two thirds saw rises in operating expenses and nearly two thirds saw a rise in staffing costs.
Just over 30% of businesses reported a drop in profits over the previous six months, although this is a decrease from the 42% of businesses who reported the same in 2023.
The percentage of businesses reporting increased profitability has remained low and largely static between 2023 and 2025 at around 15%.
Approximately 45% of businesses stated that they had increased the prices of their goods or services over the previous six months.
Rising Costs
The chief factors cited as influencing price rises were, in descending order of frequency, labour costs, energy prices, and raw material prices.
While rising labour costs have previously been identified in this summary as a major influence on prices, and presumably also on operating expenses, difficulties recruiting staff has also been reported as a problem by a large number of businesses.
Approximately half of businesses reported that they have encountered such difficulties, and nearly half of these businesses report that these difficulties are sufficient to have caused further operational issues.
Labour Shortage
The most frequently reported issues caused by a difficulty recruiting were the need for current staff to work additional hours and an inability to meet demand.
The most frequently reported reasons for difficulties recruited were a lack of suitably qualified applicants, and, for nearly 15% of businesses, a lack of applications in general.
In addition to businesses facing difficulties recruiting, just over 25% of businesses reported that they were experiencing a shortage of labour.
Good to do Business?
There is evidence that those businesses who regard the Isle of Man as a place in which it is easy to do business are in a minority and that their numbers have reduced since 2024.
In 2025 a slightly larger percentage of businesses expressed moderate to strong disagreement, potentially representing increasing concerns that the difficulty of doing business in the Isle of Man is increasing.
Moreover, while just over 70% of businesses would to some extent recommend the Isle of Man as a place to do business, this has fallen slightly in recent years and dropped from approximately 90% in 2017.
Dissatisfaction
The biggest drop seen in this area is between those who would completely, as opposed to somewhat, recommend the Isle of Man, which has fallen from 53% in 2017 to just over 33% in 2025.
Conversely, the percentage of businesses who would not recommend the Isle of Man has increased from just under 7% to just under 20% over the same period.
One factor contributing to this may be the fact that there is evidence for relatively elevated levels of dissatisfaction with some of the amenities, services, and aspects of doing business on the Isle of Man.
Of these, the greatest levels of dissatisfaction were expressed for the planning system, which met with moderate or strong dissatisfaction from just under two thirds of businesses, and the cost of transport links to and from the Isle of Man, towards which just under 60% of businesses expressed dissatisfaction.
Set against this is the fact that some amenities met with broad satisfaction, in that a majority of businesses expressed broad satisfaction with both the cost and quality of utilities and hotels on the Isle of Man.
The entire report can be viewed here.
