The results of the latest Quarterly Economic Survey (QES) from the Lancashire Chambers of Commerce have revealed that the local economy is still growing but at a much slower rate than a year ago.
The new survey, compiled by the county’s three Chambers in association with Moore and Smalley Chartered Accountants and Business Advisors, shows that most key manufacturing and services balances were weaker in the fourth quarter of 2015, but manufacturing firms fared far worse. This has led to the county’s two-tier growth trend to become further entrenched.
Most key balances for the services sector dipped slightly again on the previous quarter, with domestic sales continuing to be the main contributor to overall growth. The sector, however, continues to remain resilient in the face of global headwinds.
However the manufacturing sector continues to struggle. Domestic and export sales and order balances have now fallen to a four-year low, suggesting that the sector is close to stagnation.
The results from the Chambers of Commerce survey were revealed to an audience of local businesses at Preston’s College on Tuesday morning by Stephen Gregson (pictured), Corporate Finance Director at Moore and Smalley.
Commenting on the survey, he said: “The latest survey results do suggest that it is becoming a little harder to argue that the NW economic glass is half full. With a slowdown in the Chinese economy, the US Fed raising interest rates, mixed with what is starting to feel like consumer debt and possibly also housing bubbles inflating in the UK, things are looking a bit less optimistic than a year ago.
“Coming after relatively weak figures in the Q3 survey, the falling balances in Q4 highlight the risk that the economy may weaken further. That said, the survey does have some positive aspects in relation to employment. As ever the QES is probably best at highlighting questions we should consider as opposed to black and white answers.
Babs Murphy, Chief Executive of the North & Western Lancashire Chamber, added: “While these latest figures demonstrate growth, it is clear that there are warning signs of potential trouble ahead. The declines across the board should send a message to government that UK firms are in desperate need of a favourable business environment, not more administrative burdens.
“It is not enough to rely upon consumer spending and the housing market to grow the economy, nor to rely purely on services to drive export growth. We need a rebalanced economy if we are to continue punching above our weight on the global stage.
“The real concern is that this period of two-tier growth becomes the norm rather than a blip. This requires the government to make 2016 a year of action, on infrastructure, skills, and access to non-equity finance for firms. Otherwise the UK economy could suffer negative consequences in the face of increasing global uncertainty.”