Is Brexit uncertainty bearing down on Suffolk’s economy? Economic report shows clouds on the horizon
- Credit: Archant
The latest figures from Suffolk Chamber of Commerce’s Quarterly Economic Survey (QES) shows business activity is slowing, but it’s a very mixed picture.
The latest figures for the final three months of 2018 shows how the county’s businesses are faring.
In general terms, business activity and sentiment has continued to decline from earlier peaks, although the county is broadly in line with other parts of the eastern region.
These results are based on responses from 140 Suffolk-based organisations, with 33 from the manufacturing sector and 107 involved in services.
Here is a breakdown of the results, highlighting key issues:
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Overall, Suffolk manufacturing firms continue to report more bullish data than in other sectors, and account for the two main improvements on the third quarter 2018, with export sales up from 15% to 41% and export orders at 32%, up from 11%.
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Manufacturing sector employment growth returned to second quarter levels, with a 31 percentage points fall in the balance taking it back to 12%.
In the service sector, the local balance fell by six percentage points and so is also at 12%.
Suffolk businesses continue to report largely favourable performances, with positive responses outweighing negatives ones in most cases.
But Suffolk businesses don’t appear to be feeling positive about the outcome of Brexit, as when it comes to future profitability, the balances reported (manufacturers at 0% and service companies at -2%) are at their lowest levels since the second quarter of 2017.
The percentage of businesses attempting to recruit staff fell for the second quarter in a row for both sectors.
The numbers of companies reported a continuing difficulty in finding the right staff fell slightly, but the figures remain historically high (70% for manufacturers and 72% for service companies).
There were slight declines reported in cashflow levels, investment in both equipment and training, future turnover projections and the numbers of firms operating at full capacity, although most of these indices remained in positive territory.
A majority of respondents indicated they were under pressure to raise prices, especially in the manufacturing sector where 55% said they intended to raise prices, compared with just 3% who signalled the opposite.
These figures are broadly in line with the east of England as a whole, although the Suffolk results appear more bullish in terms of both domestic and overseas sales and orders.
When asked about their main external areas of concern, Suffolk’s businesses reported a major spike in worries about competition (up from 38% to 57%), with corporate taxation rates and inflation in second and third place respectively.