Suffolk Chamber calls for post-Brexit business boost

The latest figures from Suffolk Chamber of Commerce’s Quarterly Economic Survey (QES) – for the third three months of 2019 – shows another period of overall decline in reported business activity and sentiment, especially for service companies, prompting the organisation to call for a post-Brexit business boost.

138 firms from Suffolk completed the latest survey, with 37 from the manufacturing sector and 101 in services.

There have been declines compared with the previous quarter in 19 of the 30 main indices recorded by the QES, with 11 notching up improvements.

Suffolk businesses, on the whole, are more robust than the East of England average where no fewer than 26 of the 30 criteria saw declines compared with the second quarter of the year.

The biggest falls among Suffolk businesses, both manufacturers and services companies, were to be found in some of the key longer-term criteria recorded by the survey, including in training investment, confidence in improving profitability, confidence in improving turnover and with one exception in each, future cashflow projections and employment expectations.

In spite of these declines, a majority of the criteria are still in positive territory, meaning that more businesses are reporting increases than those recording decreases, albeit by smaller margins.

The bounce back in terms of current activity among manufacturers, first noticed in the last quarter, has continued into the third, with small improvements in domestic sales, domestic orders, export sales and export orders.

By contrast, service companies are reporting declines across all criteria, with the exception of export sales and the impact of rising prices. Of particular concern are the numbers of categories which are in negative territory, including: domestic sales (-2%), domestic orders (-20%), overseas orders (-13%), cashflow (-14%) and future profitability (-10%).

Paul Simon, Suffolk Chamber’s head of communications and campaigns, said “the latest QES data suggests that our manufacturers are doing well overall, especially in terms of growing their export markets. However, even among these companies, the declines in longer-term measures of activity and sentiment does need to be watched carefully.

“The declines for service companies seems, by contrast, to be gathering steam, following on from previous quarter-on-quarter reductions in activity and sentiment.

“It would be too simplistic to ascribe the uncertainty surrounding Brexit and our longer-term relationship with the European Union as being the sole cause for these declines. However, it is clear that appropriate assistance from government as we leave whether that be overnight or during a transitional period would be helpful in smoothing out any further turbulence.”

Suffolk Chamber is backing calls from its national body, the British Chambers of Commerce for a programme of measures aimed at helping small and medium enterprises (SMEs) maintain their cashflow. This includes a Brexit Finance Guarantee scheme to facilitate business finance to SMEs that are viable but unable to obtain finance due to exceeding their lenders’ risk appetite due to significant exposure to a potential no deal Brexit.

In addition the BCC is advocating a Brexit SME tax relief scheme for one year to support SMEs who need to undertake activity as a consequence of no-deal related disruption and a one -year reduction in business rates for those with a low rateable value.

The key headlines from the survey are:

• The balance of manufacturing firms reporting an increase in domestic sales rose from -7% to -3%, and fell +14% to -2% for those in services
• The balance of manufacturing firms reporting an increase in domestic orders rose -10% to -6%, and fell -1% to -20% for those in services
• The balance of manufacturing firms reporting an increase in overseas sales rose from 0% to +7%, and rose from 0% -12% to +5% for those in services
• The balance of manufacturing firms reporting an increase in overseas orders rose from -12% to 0%, but fell from -12% to -13% for those in services
• The balance of manufacturing firms reporting an increase in employment was unchanged at +16%, and fell from +19% to+4% for those in services
• The balance of manufacturing firms anticipating a future increase in employment rose from +3% to +11%, and fell from +24% to +5% for those in services
• The balance of manufacturing firms projecting an increase in turnover fell from +31% to +24%, with those in services decreasing from +20% to +2%
• The balance of manufacturing firms projecting an increase in profitability fell +10% to +5%, with those in services decreasing from 0% to -10%
• The balance of manufacturing firms projecting an increase in cashflow rose from 0% to +19%, with those in services falling from 0% to -14%

For further information about business in Suffolk the Chamber of Commerce can be contacted through their website.
(Suffolk Chamber is grateful to Suffolk Knowledge, part of Suffolk County Council, for providing the analysis of this QES).