The results of the latest Quarterly Economic Survey (QES) from the Chamber of Commerce show that the county’s two-tier growth trend continues, with economic recovery still being driven by services and domestic demand.
The new survey, compiled by the county’s three Chambers in association with Moore and Smalley Chartered Accountants and Business Advisors, reveals modest growth in the Lancashire economy but the pace of growth in both sectors has slowed for the second consecutive quarter.
Overall the results are disappointing as most key economic balances weakened, notably in the manufacturing sector. Of particular concern was the contraction in manufacturing exports where both sales and orders balances reached a four year low.
One of the few positives in this quarter’s results was the increase in both sector’s workforce levels. Despite slower growth over the last two quarters, firms are still recruiting and reporting workforce levels are up. Business confidence also remains high in both sectors, although stronger amongst service businesses.
Commenting on the results, Babs Murphy, Chief Executive of the North & Western Lancashire Chamber, said:
“The Q3 results show that Lancashire businesses still face some major challenges. Global uncertainty, weakened demand from China and the strength of the pound are some of the factors likely hindering manufacturers’ performance. If the manufacturing sector has entered a prolonged period of slow growth, then closing the trade deficit and improving the current account deficit will become more difficult.
“However, if we want to make sure this period of two-tier growth is only temporary then we must help businesses get access to the working and growth capital that they require. We must also deal with the intensifying skills gap, which is holding British businesses back. Only action to help fix the fundamentals – skills, infrastructure and access to capital – can help end the UK’s two-tier growth pattern and ensure all businesses can grow.”
Stephen Gregson, Corporate Finance Director at Moore and Smalley, added:
“From this quarter’s results it’s difficult to say with any certainty that the economy is faltering. Clearly there has been slow-down, particularly in manufacturing, but we shouldn’t look at this data in isolation. Results from the Chamber’s QES over the last four years have shown us that such minor peaks and troughs are becoming the new norm. Current workforce levels and business confidence measures are positive and there is still growth, albeit slower growth, in the Lancashire economy. The glass remains very much half full.”