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.
