The government today launched its National Loan Guarantee Scheme, which is intended to help businesses with a turnover of less than £50m access funding more cheaply.
The guarantees will apply to new term loans, hire-lease arrangements and refinancing of loans (where the term amount has changed). Please see the attached information from the government, designed to help businesses understand the scheme. Currently, the banks participating in the scheme are RBS, Lloyds, Santander, Barclays and Aldermore (further banks may join).
BCC’s Quarterly Economic Survey for Q1 2012 shows encouraging signs of growth, but the pace of recovery is still too slow
Caroline Williams, CEO Norfolk Chamber of Commerce: “Norfolk and the rest of the UK has the potential to recover, but to achieve that the government has to set businesses free to grow”
The British Chambers of Commerce’s new Quarterly Economic Survey (QES) released today (Tuesday) shows encouraging results for Q1 2012, with most balances recording increases on the last quarter. The new survey, comprising almost 8,000 responses from businesses across the UK, shows a welcome improvement on the results of Q4 2011 which pointed towards stagnation.
While the results are more encouraging than the previous quarter, they show that growth in Norfolk and the rest of the UK is still too weak, with the balances still below those seen in 2007 before the recession. Many manufacturing balances are now at a satisfactory level, but the service sector balances are sluggish.
Balances measuring domestic and export activity across firms showed welcome increases, and more businesses are looking to invest in employing more staff, training, and plant and machinery. However, cashflow is still a real problem, and despite concerns about inflation decreasing, recent increases in oil and food prices may alter this over the next few months.
Domestic orders The Norfolk manufacturing sector saw an increase in domestic sales and orders from the last quarter. This is also reflected across the rest of the East of England and at a national level. However Norfolk’s service sector saw a reduction in both sales and orders from the previous quarter. Nationally the service sector showed a small measure of improvement:
Norfolk manufacturing home delivery results went up 20 points to +32%, and home orders rose 13 points to +19%. However in the Norfolk service sector, the home deliveries balance dipped slightly from 18% to 15% and the home orders balance dropped from 9% to 6%
Exports Export sales and orders in both the manufacturing and the service sectors continue to improve with Norfolk, East of England and the national results all showing increases from 2011:
Balances recording exporting activity for Norfolk manufacturers strengthened in Q1 2012 and rose by 16 points to +37% – a level not seen since Q3 2010. The Norfolk service sector, whilst improving its orders, showed a slow down on actual deliveries in the last 3 months
Though stronger than domestic orders, Norfolk exports are still below levels seen in the BCC’s Quarterly Economic Surveys prior to the recession
Employment Figures for the last 3 months continue to show a downwards trend in both the Norfolk service sector and the manufacturing sector. However Norfolk employers are still showing some optimism for improvement in these figures, with both sectors recording increases:
The manufacturing employment balance is stronger at +14%, than the service sector balance, which is still weak at 3%
Firms in both sectors are more optimistic about future recruitment than during Q4 2011. The balance of Norfolk manufacturing firms looking to increase workforces increased by 7 points to +19%, a level not seen since Q3 2011. In the Norfolk service sector, figures surged by 15 points to +25% – a level last seen in Q1 2011
Business confidence & investment Confidence across both sectors improved in the last 3 months. Norfolk businesses are showing optimism in both turnover and their expected profitability for the next quarter. Both sectors are also advising that investments in plant, machinery and training are also increasing:
The balance measuring Norfolk manufacturers’ expectations for increasing turnover and profitably jumped to levels last seen in Q4 2010. Among the service sector, turnover confidence increased to +54% (last seen in Q4 2010), and profitability confidence rose to 50% (back to levels in Q4 2010)
More Norfolk firms are looking to increase investment. Plans by Norfolk manufacturers to invest in plant and machinery increased to +27% (the strongest level since Q4 2010), and intentions to invest in training increased by 10 points to +31%. For the service sector in Norfolk, the results were mixed with the balance measuring investment in plant and machinery dipping by 2 points to +9%, whilst the training balance rose 2 points to +25%
Cashflow Balances measuring cashflow (the movement of cash in an out of a business) remain weak, and are now in negative territory for both the manufacturing and the service sector in Norfolk. Overall both the Norfolk manufacturing sector and the service sectors have advised that they expect to have to increase prices over the next 3 months. This is reflected at a regional and national level as well. Norfolk manufacturers in particular, have advised that price increases were expected due to raw material costs rising:
The manufacturing cashflow balance fell heavily by 25 points, to -22%. The services cashflow balance also dropped by 13 points, to -16%
Both the sectors reported a decrease in their operating capacity, with only 27% of Norfolk manufacturers and 36% of the Norfolk service sector operating at full capacity
Commenting on the results, Caroline Williams, CEO of Norfolk Chamber of Commerce, said: “It is encouraging to see that businesses are feeling more confidence at the start of 2012 than they were at the end of 2012. Norfolk businesses are showing optimism in both turnover and their expected profitability for the next quarter. Both sectors are advising that investments in plant, machinery and training are also expected to increase. However, the Norfolk economy is still facing huge challenges and the recovery is still too slow.
The results of the Quarterly Economic Survey point to a welcome but modest improvement in the Norfolk economic situation. The UK economy will likely avoid a recession, though the erratic construction figures may distort the ONS estimate. On the basis of this survey, the British Chambers of Commerce are now predicting quarterly GDP growth of 0.3% in Q1 2012, in line with the OBR’s recent forecasts. However, growth is likely to remain low for some time, and a return to a more normal pace is unlikely until 2013.
The BCC forecast for 2012 GDP is 0.6%. Their prediction is lower than that of the OBR* for two reasons. Firstly, we are still concerned that the unresolved problems in the eurozone may trigger new upheavals later this year. Secondly, in view of the increases in oil and food prices since January, our current forecast is that the fall in UK inflation over the next 12-18 months will be slower than first expected.
“With domestic demand in Norfolk remaining weak and unemployment likely to increase over the next year, every effort must be made to boost growth and empower the private sector to create jobs. While the government perseveres with efforts to cut the deficit, it must reallocate priorities, within the spending envelope, towards growth enhancing policies. Red tape must be cut more aggressively, the credit easing programme must be made more effective, and the MPC must do more to ensure that the huge QE programme encourages increased lending to viable SMEs.”
Commenting on today’s Monetary Policy Committee (MPC) decision, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“Following the February increase in Quantitative Easing (QE), the decision to keep interest rates and the QE programme on hold was widely expected. With QE still being implemented, and given the MPC’s self-imposed practice of only buying gilts, this was the right decision. However, last month two MPC members voted for an increase in QE to £350bn. While support for this may be strengthening, we believe that adding to QE would be unnecessary.
“We supported past increases in QE because they eased pressures on the banking system and helped to underpin financial stability. However, this has not led to meaningful increases in lending to small businesses, and the benefits to the real economy have been limited. Increasing QE now would only have a marginal effect. There is ample liquidity in the financial system and there is no need to drive down yields on government bonds further.
“The main policy aim must be boosting the unduly low rate of economic growth by increasing lending to viable businesses. To achieve this, it is vital to make the new credit-easing scheme more substantial. But the MPC also has a part to play. The committee should reconsider its reluctance to include assets other than gilts in the QE programme, such as securitised SME loans. This will make the banks less risk averse, and will help to improve the flow of lending to credit-worthy firms.”
Grants of between £25,000 and around £1 million are available to enable “significant game-changing, transformational performance in farm, forestry, tourism, agri-food and micro businesses in rural areas.” Grants will be a maximum of 40% of project costs and must be matched by private funds. Outline applications need to be submitted by 30 April and applications in upland and Rural Growth Network areas will be prioritised.
The London 2012 Olympics may well be a once in a lifetime opportunity (the last time the Olympics were held in London was 1948) for many of us to experience the Olympics first hand. This has the potential if not handled correctly to cause friction between employees (who wish to attend or volunteer at the Games) and employers (who have businesses to run and staffing levels to maintain.
ACAS have issued some guidance for both employers and employees, which include an informative Q & A section.
Tidal Transit Limited provides access, transport and crew transfer services to the industries of the North Sea. Operating from the North Norfolk coast we specialise in safe, speedy and efficient travel for those working in the offshore wind energy sector. Our fleet of custom-built, high specification wind farm work boats offer unparalleled stability and are crewed by fully qualified personnel with a thorough local knowledge and maritime experience.
Tidal Transit Limited was incorporated in January 2011 having formerly traded at Norfolk Fishing Trips under the management of Adam Wright of Thornham. Norfolk Fishing Trips had been running since 2005 offering day charter fishing trips from Brancaster Staithe in the summer and Lowestoft in the winter. It evolved into Tidal Transit to make the most of the growing offshore energy sector around the UK and especially wind.
Since January 2011 Tidal Transit Limited has raised over £2m for funding the development of its fleet of new purpose built offshore wind support vessels. We took delivery of Ginny Louise in December 2011 and Eden Rose in April 2012. The Company plans to build a further 8 vessels upon the same design which we aim to be available during the next 2 years.
Adam Wright (Operations Director) and Leo Hambro (Commercial Director), are in the EDP Future 50 for 2012 and Tidal Transit’s vessels were finalists in EEEGR 2012 Innovation Awards.
Ginny Louise is working for SSE on the Greater Gabbard Wind Farm. Eden Rose will arrive in the UK on 18th April and is looking for work Katie Louise returned to Brancaster Staither for the summer season on 2nd April.
New Chamber member Saxon Air is the fastest growing Private Air Charter company in the UK. Established in April 2007 by founders Christopher Mace and James Palmer having a combined experience of over 20 years in aviation, and with the financial backing of businessman Graeme Kalbraier
Since 2007 the business has gone from strength to strength, as today they own and operate a modern fleet of private jets and VIP helicopters. Early in 2010, they were awarded a 10 year contract as the preferred Handling Agent to supply ground handling services at Norwich International Airport for all non-scheduled business, private and general aviation aircraft.
With continued growth Saxon air built their £7.9m Business Aviation Centre and Hangar facility was completed in May 2011
I hope you will join me in welcoming them at the next Chamber event.
Annual CPI inflation up from 3.4% in February to 3.5% in March
Annual RPI inflation down from 3.7% in February to 3.6% in March
Commenting on the inflation figures for March, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The inflation figures for March were broadly as expected. However, it is disappointing that the steady fall in inflation seen since September 2011 has been reversed this month. We expect inflation to fall over the remainder of the year, but the decline will be less than the Monetary Policy Committee (MPC) has envisaged. This means that the pressures on businesses and consumers will ease, but not as rapidly as first hoped.
“With inflation falling more slowly than expected, we believe that any further increases to the Quantitative Easing (QE) programme are unnecessary. The main priority should be ensuring that the additional liquidity provided by the most recent QE increase is put to better use to improve the flow of lending to credit worthy businesses. The government’s credit easing programme should be made more substantial, but the MPC must also reconsider its reluctance to purchase private sector assets.”
In the three months to February 2012, unemployment fell by 35,000 while employment rose by 53,000
The number of unemployed people aged 16-24 fell by 9,000 but remained above 1million
The number of people working part-time because they could not find a full-time job rose by 89,000 to the highest figure since records began
Commenting on the labour market figures published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“With economic pressures facing the UK and ongoing problems in the eurozone, these figures were broadly positive, showing that unemployment fell and employment increased. But there are certain features which are causing concern. Youth unemployment, though slightly down, remains above one million, and the number of people working part-time because they can’t find a full-time job reached a new peak. Although the rise in employment is welcome, we can’t ignore the fact that part-time jobs have risen while the number of full-time jobs has fallen. The overall message from these figures is encouraging, however, as they show the ability and willingness of the private sector to drive recovery at a time when the public sector is likely to shrink further.
“But the challenges facing the labour market cannot be overlooked. As the deficit-cutting plan forces the government to reduce employment, it is likely that the unemployment total will increase over the next year. Every effort must be made to reduce the regulatory burden on businesses and increase the flow of lending to credit worthy firms so the private sector can create new jobs.”
George Padelopoulos, Sustainability Manager, Ethical Trade, B&Q, will be speaking at Norfolk Chamber’s Sustainability 2012 Conference on 10 May at the John Innes Centre.
B&Q has recently won the UK’s most prestigious business award, The Queen’s Award, for its work in creating a sustainable business and helping people improve the sustainability of their homes,
At the Sustainability 2012 Conference Mr Padelopoulos will be delivering a presentation entitled: ‘Preparing for the Green Deal – a B&Q perspective’. He commented: “With more than 18 million homes likely to be eligible under the Government’s Green Deal programme, this presentation will take delegates through some of B&Q’s experiences in preparing for and providing an outline of what the Green Deal could mean for businesses.”
The UK’S largest home improvement retailer, which has already been named Retail Week’s Responsible Retailer of the Year this year, B&Q will be presented with their Sustainable Development Award later this year. It demonstrates that corporate social responsibility is intrinsically linked to business success, not at odds with it.
Whilst the retailer proved it has made significant progress by; reducing its own emissions; investing in green technologies; educating its employees; and helping people make their homes more sustainable – the award was, in no small part, made as a result of B&Q’s 20 year journey to become the first major UK retailer to only buy timber products from proven responsibly-managed sources.
As well as now stocking more than 15,000 Forest Friendly products, B&Q also provides a range of over 3,500 independently accredited One Planet Home eco products, designed to reduce levels of environmental impact or help people get greener homes. Currently 12 per cent of product sales are from the eco-brand. Already looking ahead to the launch of the Green Deal later this year, B&Q is researching and developing new products and advice to ensure it can offer people the help and advice they need to take advantage of the Government’s Green Deal offer to ecovate their homes.
Matt Sexton, Director of Corporate Social Responsibility at B&Q said: “This award is a huge honour and confirms B&Q as one of the UK leaders in more sustainable retailing.
“Our sustainability journey started over twenty years ago when we were challenged about where the timber in our garden furniture came from. Today we monitor over 15,000 timber and paper lines specifying that they come only from proven responsible sources. This has meant making some hard commercial choices along the way but we believe it is the only way to operate.
“We have made good progress against other One Planet Home goals with substantial cuts to greenhouse gas emissions, solvent levels in paint and the amount of waste we send to landfill. This is thanks to teams throughout our business, who constantly work to support our One Planet Home goals. We always strive to do the right thing and if we don’t always get it right we work hard to put it right.
“We are delighted to have been recognised with this prestigious award which will spur us on in pursuit of our goal of becoming a truly sustainable business.”
Some of B&Q’s sustainability headline achievements:
VOC levels per litre of paint cut by 60% in the last ten years
26% cut in carbon emissions from transport versus 2006/7
24% cut in carbon emissions from store electricity versus 2006/7
87% of waste diverted from landfill in 2011/12
Overall reduction in absolute carbon emissions of more than 20% since 2006/7
Peat content in plants and growing media cut from 71% to 44% in ten years
Launched its Forest Friendly campaign to raise awareness of the importance of only buying products made from or containing wood that has come from sustainable, well-managed forests because individual buying choices can help prevent deforestationCampaigned in Europe to ban the import and possession of illegal timber
Launched an One Planet e-learning module for staff – completed by 12,000 staff
Purchased and ecovated a two-up-two-down end of terraced house, which now meets 2050 energy standards which has cut emissions by 69 per cent
Is a founding partner of the Ellen MacArthur Foundation dedicated to propagating developments in closed loop business models
Has appointed a Youth Board (mentored by B&Q’s board directors) to help shape the business’ sustainability strategy. The young people present their recommendations to B&Q Board and Dame Ellen MacArthur at the end of July.
Retail Week’s sustainable business of the year 2012; was listed in the top 20 of Sunday Times Best Green Companies 2011; was given The Observer’s Ethical Business Award 2010
Leading the way in sustainable innovations. Introduction of Clean Spirit, Powder Paint, recycled newlife paint, recycled plastic loft insulation, carpet underlay made from old clothing.
Continuing to champion leading employment policies. A quarter of the workforce is over 55 with a similar percentage under 25 and only UK business to be recognised as a world class employer for five years running by Gallop
Helping your people develop practical skills through our Job Done schools programme, our partnership with UK Youth and the DIY Scout badge
For more details of the work B&Q has been doing read our action plan
Last night saw the first Chamber Chill Time! event kick off in style. The event was really well attended and everyone got into the mood with a drink and light bites on arrival. The Vodka Revolution bar in the heart of Norwich was the perfect setting for a relaxing evening of networking.
We heard from Kieran Miles of Ultimate impact media who gave an inspirational speech. Everyone was enthused by his story and he left everyone determined to follow their dreams.
Once people’s spirits were lifted, the spirits then started to flow as the cocktail master classes got underway. Everyone got into the stirring, shaking and in one case throwing the cocktails as well as being able to mix with each other, enjoy networking over a glass of something cool and do business.
For details on future events contact the Events Team on 01603 625977 or at [email protected]
The news that the UK economy contracted in the first quarter – thereby heralding a technical recession – was unexpected. Here at the Chamber, we were awaiting an unimpressive but positive figure, given the results of our latest Quarterly Economic Survey and also what we hear day in, day out, from Norfolk business in the real economy. The feeling of ‘guarded optimism’ that comes through in conversation with Chamber members, and in most of the business surveys, suggest that the state of the economy may not be quite what the media or the number-crunchers at the Office for National Statistics believe.
That said, however, one thing is clear: whether we’re in technical recession or a period of incredibly weak, zigzag growth, Norfolk’s economy remains fragile, and stagnation is the real threat. This inherent fragility affects both sentiment and investment intentions, meaning that the Chamber’s call for special capital allowances, a stop to business rate rises, and improved access to finance at the time of the Budget looks all the more prescient. We said at the time, that action to support growth was as important as action to cut the deficit – and that remains the case today.
Aside from the GDP figures and the insufferable national media navel-gazing around the Leveson Inquiry, there is some positive news to report. Prompted in part by the work of the Chamber, government ministers renewed their pledge to improve public procurement – and to achieving an ambition of 25% of central government contracts going to small- and medium-sized firms. They’re already more than halfway there, having gone from 6.5% to 13.7% in a short space of time. However this doesn’t yet cover local government, the local NHS or some other bodies, so we are encouraging our local government bodies to follow suit as most of Norfolk’s small businesses cannot take advantage of this change in national government policy.
We will continue to run our Meet the Buyer events giving access to the local public bodies and larger private sector businesses with the next one planned for 20 September in Kings Lynn. The development of Sizewell C may seem a long way off but, as 80% of EDF Energy contracts will be non nuclear, businesses need to register on their supply chain portal www.sizewellcsupplychain.co.uk
Norfolk manufacturers especially those exporting report they are busy especially in the energy sector. Our food manufacturers have been watching the weather like hawks as they monitor the steadily rising grain price, but the recent weather change to rain in Western Europe has made them more optimistic about the future. Our boat builders at the luxury end are seeing a strong order book and the ‘staycation’ trend is encouraging the fleets to order new boats. I guess my message is that although it is not easy out there, Norfolk businesses are up to the challenge. I know that we do need rain but for our sanity and for the benefit of our important Tourism sector I hope we do get a dry sunny bank holiday weekend to recharge our batteries and get our Norfolk economy growing.