Companies seek government help as economy buckles
- Credit: Archant
Suffolk business leaders have renewed calls for long-term government help as companies continue to get dragged down by the twin effects of coronavirus and Brexit.
Despite a rebound in the last three months of 2020 - in the period before the government's latest national lockdown announcement - companies were recovering at a slower pace than previously, Suffolk Chamber of Commerce's Quarterly Economy Survey (QES) indicates.
Sales, orders and hiring intentions all saw improvements on the previous quarter - but cashflow and investment took a hit. In all, there were improvements across 22 of the 30 criteria contained in the survey - but most are still in negative territory as more companies show declines than rises.
However, a quarter more of manufacturers said their domestic sales had risen compared to the previous quarter - with a balance of +21% reporting an increase rather than a decrease. Overseas sales also rebounded - up 11% on the previous quarter to stand at +5%.
Manufacturing firms were also taking on more staff, with those reporting an increase in workforce numbers rising from +4% to +27%, and those anticipating a future increase in employment rising from +5% to +33%.
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However, companies reporting positive cashflow fell by 8% to stand at a balance of 0%, while investment in plant, machinery and equipment dropped by three points to +13%.
But service firms continued to take a hit, with a balance of -9% reporting a rise in domestic sales, while overseas sales stood at -21% - a rise of 49%.
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The number of service firms reporting a rise in worker numbers increased marginally from -10% to -9%, with those anticipating a future increase in employment improving from -18% to +10%
Suffolk Chamber's head of policy Paul Simon said the figures contained "a lot of hope and optimism" and reflected the "resilience and hard work of the county's business owners and their employees during a period of great uncertainty due to the second spike in Covid-19 infections and the UK/EU trade negotiations".
"However, if business activity and sentiment is to continue to rebuild, and some of the key indicators such as cashflow and investment are to reverse their recent declines, it is vital that the government now articulates its full programme of support for 2021, including a budget which reboots how firms pay tax as as to boost and not penalise long-term risk-taking and growth," he said.