Economic uncertainty impacts on Norfolk business
The British Chambers of Commerce (BCC) today (Thursday) publishes its Quarterly Economic Survey – the UK’s largest business survey with over 7,000 responses, including Norfolk businesses.
The overall UK results show solid growth for both sectors, particularly in relation to domestic and export sales and orders. However the majority of the Norfolk and the East of England results bucked the UK trend. The exception being the East of England manufacturers, who saw their domestic and export sales and orders reflect those results seen at a national level, which Norfolk didn’t
Key Norfolk findings in the Q1 2017 survey:
- Both sectors reported falling domestic sales (Manufacturing 24% to 9% and Service 24% to 14%)
- Export sales fell in both sectors (Manufacturing 18% to 17% and Services 11% to 6%)
- Reduced employment in the last 3 months was reported by both sectors (Manufacturing 34% to 5% and Service 19% to 12%)
- The number of Norfolk manufacturers intending to increase prices remained static
- In the services sector, the balance of firms expecting prices to rise increased from +32% to +39%
- Both sectors highlighted an increase recruitment difficulties and reduced recruitment intentions
Manufacturing – Q1 2017
The majority of Norfolk manufacturing balances for Q1 showed a loss of confidence and many expressed caution in the current uncertain economic times. Reduced orders and sales points to more support being needed by Norfolk businesses to help them investigate overseas trading opportunities.
Despite increases in raw material prices, due to a weak pound, many companies have advised that they do not intend to increase their prices to ensure that they remain competitive.
Service Sector – Q1 2017
Norfolk’s service sector was definitely more cautious in the first quarter of 2017 than in the previous quarter. Current economic uncertainty translated into reduced domestic and export sales and orders. As with the manufacturing sector Norfolk’s employment expectations dropped. However, the number of companies within the service sector expecting to raise prices increased.
Commenting on the results, Caroline Williams, Chief Executive of Norfolk Chamber said:
“Whilst the national picture is still showing solid growth, the local view is not as optimistic. The impact of economic uncertainty is starting show. The rise in inflation seen since last year's EU referendum is identified as an increasing pressure facing local businesses.
“The myriad of upfront costs imposed by government - including business rates, Apprenticeship Levy, National Living Wage and insurance premium tax - are all adding to the overhead costs of firms and the pressure on prices, which is impacting on our county. Norfolk businesses need Government to recognise the need to invest in Norfolk to assist business to reverse these negative trends.”