Suffolk Chamber survey reveals strong improvement in cash flow but concern over export prospects
- Credit: Archant
A major survey of firms across Suffolk has shown cash flow is at its highest level for more than 14 years.
The Suffolk Chamber of Commerce third Quarterly Economic Survey for 2014, covering July to September, reaveals that cash flow balances, which have been languishing in negative territory for much of the past four years, have shown a strong improvement in recent months.
“The positive response from both our manufacturers and the services sector around cash flow is excellent news,” said Sarah Howard, president of Suffolk Chamber. “The confidence of our business leaders is essential in securing economic and employment growth. Coupled with their hard work and entrepreneurial spirit it is a strong indicator for a positive future.”
However, the survey is also a reminder that the economic recovery is fragile, with the export market, which has been consistently strong over the past two years, showing a decline during the past quarter.
Domestic market results from the service sector dipped for the second consecutive quarter but remain at a very high historic level. The local home deliveries balance dropped by two percentage points to plus 39% and service sector businesses are anticipating similar conditions for the coming quarter, with the local domestic market orders balance also down 2% at plus 35%.
Suffolk manufacturing exports weakened to their lowest level since the end of 2011 in the third quarter but comfortably held on to positive territory at plus 25% compared to a national average of plus16%. It is a similar story for prospects for the coming quarter, with the balance down by 33 percentage points to plus 25% but still well ahead of the national average of plus 14%.
“With manufacturers reporting a six-year high in domestic performance and the services sector still at very high historic levels there is much to be encouraged about,” Ms Howard added. “Although the chamber is concerned at the export market performance we will be exploring ways of working even more closely with our members to support them in their export ambitions.”
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Employment trends in the manufacturing sector declined during the third quarter, after improving in the previous three months, but remain in a relatively healthy state at plus 27%. Prospects for the coming quarter are more positive, with the balance reaching an all-time high level of plus 45%, meaning a far larger proportion of firms are anticipating taking on new staff than those expecting their staffing levels to fall.
In the service sector, Suffolk-based businesses reported another rise in employment levels, albeit not as strong as seen in the second quarter, at plus 16%. In general employment increases are still anticipated with a balance of plus 20%.
“Levels of employment are holding up well and the prospects going forward look good,” said Suffolk Chamber chief executive John Dugmore. “The chamber will continue to represent the interests of members and the wider local business community to ensure that support for skills training matches future employment growth.”
Confidence in turnover among Suffolk-based manufacturers remains very high at plus 64% after a nine percentage point in-quarter improvement. This balance has now remained in positive territory since the second quarter of 2009. The Suffolk manufacturing sector confidence in profitability balance soared to an all-time high level of plus 73% after a fourth consecutive quarterly rise (up 18 percentage points) took it way beyond the previous high seen in the previous quarter.
“This Survey tells us that the Suffolk economy is continuing to recover although and that although there are areas where that recovery is fragile the overall picture remains positive, added concluded Mr Dugmore.
The survey was conducted in October 2014 and the results were analysed by a research team at Suffolk County Council.