The previous Quarter 2 results highlighted the impact that relentless Brexit uncertainty, rising business costs and tougher global trading conditions were having on the UK economy, with a subdued service sector output and manufacturing activity deteriorating.
In the Norfolk manufacturing sector, the balance of firms reporting growth in domestic sales fell drastically and was at its weakest since Q2 2016. The number of local firms reporting an increase in export sales had also dipped to a two-year low. Firms reporting an increase in domestic orders was at its weak, whilst the corresponding balance for export orders was at its lowest in the last two years.
The Norfolk services sector saw a slight increase in the balance of companies reporting higher domestic sales and orders, but export sales and orders saw mixed weak results.
With less than 100 days to Brexit, we need your help to clearly understand where our local economy is. The Quarterly Economic Survey for Quarter 3 is now underway and we need to hear from as many Norfolk businesses as possible. Please take the short survey Q3 Quarterly Economic Survey (QES).
The QES is the largest independent business survey in the UK and is used by both the Bank of England and the Chancellor of the Exchequer to plan the future of the UK economy. It is also closely watched by the International Monetary Fund. It is vital that as many Norfolk businesses as possible take part, so we get a true reflection of the local economy.
You can have your say by completing the QES online NOW. It takes less than 3 minutes. The completion deadline for this survey is midnight on Monday 16 September 2019. The Q3 results will be published week commencing 07 October 2019.
Key findings in the Q2 2019 survey:
Norfolk Manufacturing sector:
- The balance of firms reporting increased domestic sales fell from +26 to -13, the lowest level since Q2 2016, while those reporting improved domestic orders also fell 60 points into negative territory from +41 to -19 – the weakest level since Q2 2016
- The balance of firms reporting improved export sales fell from +31 to +23, the weakest since Q2 2016 and the balance of firms reporting improved export orders dropped from +46 to +15 – the weakest since Q2 2017
- The balance of firms expecting to increase prices in the next three months stands at +56, up from +48 in Q1
- The percentage of firms (40%) reporting upward price pressures due to pay settlements are their highest since Q2 2013
- The balance of firms reporting improved cashflow remained static at +25
- The balance of firms increasing investment in plant/machinery fell considerably in the quarter from +18 to -19 the weakest level since Q4 2015
- The balance of firms confident that turnover will increase in the next 12 months rose from +30 to +50 whilst their confidence in profitability fell from +23 – +19.
Norfolk Services sector:
- The balance of firms reporting increased domestic sales rose from +9 to +12. Those reporting improved domestic orders rose from -2 to +4
- The balance of firms reporting improved export sales remained the same at +4. Those reporting improved export orders fell from +7 to -4
- Domestic and export indicators of sales and orders all remain below the levels recorded in Q3 2018
- The balance of firms expecting to increase prices in the next three months stands at +37, from +45 in Q1, which was the lowest level since Q2 2018
- The percentage of firms (38%) reporting upward price pressures due to payment settlements dipped from the previous quarter total of 47% – which had been the highest since Q1 2018
- The balance of firms reporting improved cashflow rose, but remained in negative territory, going from -10 to -5
- The balance of firms looking to increase investment in plant and machinery dropped from +6 to +2, and from +16 to +10 in training. The balance of firms confident that turnover and profitability will improve over the next year decreased from +38 to +30 for turnover from +14 to +12 in profitability. Indicators of investment and confidence remain below the levels recorded in Q4 2018
