Norfolk still showing signs of cautious growth
- Norfolk manufacturing export sales and orders strengthened from the Q1 results – in contrast to the national results which weakened
- Employment in Norfolk’s manufacturing sector increased by 10 points – whereas the national results decreased by 12 points
- Both Norfolk service and manufacturing sectors reported that they did not intend to increase their prices within the next 3 months
- Norfolk’s service sector balances for home sales and orders reflected the national results, remaining static
The British Chambers of Commerce (BCC) Quarterly Economic Survey (QES) – one of Britain's largest and most authoritative private business surveys, based on almost 7,500 responses from firms, employing around 800,000 people – shows that in the second quarter of 2015 the national service sector continued its current trend of steady progress but national manufacturing firms reported much weaker growth.
However the Norfolk results for Q2, whilst mixed, showed signs of cautious growth. Norfolk’s manufacturing export sales and orders are stronger and higher than the national results and employment in the Norfolk manufacturing sector rose in comparison to the national results.
Caroline Williams, Chief Executive of Norfolk Chamber of Commerce said:
“The Q2 2015 results for Norfolk point to continued moderate growth in the local economy over the next year. It is encouraging to see that several of Norfolk balances positively ‘bucked’ the national trend, with some results being stronger than the national balances, compared to the last quarter. However concerns over the EU and the possibility of Grexit are causing some uncertainty within the business community and the impact of the reduced oil prices are being felt locally.
“Despite mainly positive results, Norfolk still has some structural issues that are limiting our local businesses’ ability to grow. First, underinvestment in infrastructure and second, insufficient focus on helping more businesses succeed in new markets overseas. The Chancellor’s Budget, the forthcoming spending review and the remainder of this Parliament should focus on tackling these issues for the long-term.” “
Key findings in the Q2 2015 Quarterly Economic Survey:
- In Norfolk services sector, the domestic and export balances recorded mixed movements in Q2, but the overall growth level for sales and orders remained broadly static. The balance for domestic sales fell (+33% in Q2 2015, down from +35% in Q1 2015), as did the balance for domestic orders (+28% in Q2, down from +29% in Q1). However the export sales balance increased by two points in Q2 to +14%, and the export orders balance increased by ten points in Q2 to +10%.
- The Norfolk service sector’s confidence in their cashflow increased with a rise of seven points to +18%. However the balances for investment and employment both dipped – showing that businesses are still being very cautious.
- In contrast, many of the key Norfolk manufacturing balances rose in Q2 2015. Both export sales and orders balances rose (sales by eight points to +29% and orders by 2 points to +18%). Employment expectations rose by ten points to +23%.
- In Norfolk, the intention to raise prices balance dropped markedly for both sectors (manufacturing +8% in Q2 2015, down from +20% in Q1 2015 and service +11% from +22% in Q1 2015) this was in contrast to the National balance for manufacturing which rose from +11% in Q1 to +23% in Q2 2015. The national service sector balance dipped by three points from +23% to +20%.
- The balance for pressures on capacity were both down slightly (manufacturing +35% in Q2 2015, down from +38% in Q1 2015) and services (+34% in Q2 2015, up from +48% in Q1 2015).
John Longworth, Director General of the British Chambers of Commerce, commenting on the National results, said:
"These figures give us the best, most current insight into business experience and sentiment. Overall, they indicate that we will see continued growth in the economy, thanks mainly to the strength of the services sector. But the difference in results also raises the prospect of the UK experiencing two-tier growth – with modest expansion in services and markedly slower growth in manufacturing and goods.”