The results of the latest Quarterly Economic Survey (QES) from the Lancashire Chambers of Commerce show that the Lancashire economy was softening even before the nation voted to leave the European Union.
The new survey, compiled by the county’s Chambers of Commerce in association with Moore and Smalley Chartered Accountants and Business Advisors, was completed by almost 300 Lancashire firms operating across all sectors of the economy. Figures from the survey reveal that nearly all of the key economic indicators weakened compared to the previous quarter.
Workforce levels, cashflow, investment, domestic sales and orders were down across both sectors, with manufacturers in particular continuing to have a difficult time. The manufacturing UK sales balance lost sixteen points in Q2 (-3%, down from +13%) and went in to contraction for the first time since Q3 2012.
Perhaps the most positive news from this quarter’s survey was that almost all of the business confidence measures improved, with firms in both sectors optimistic that turnover and profitability would increase over the next 12 months. However, with fieldwork for the survey closing prior to polling day for the EU referendum, the concern now must be what impact the ‘Brexit’ result has on business confidence for the rest of 2016 and beyond.
The results from the Chambers of Commerce survey were revealed to an audience of local businesses at Preston’s College this morning (Tuesday 12th July) by Stephen Gregson, Corporate Finance Director at Moore and Smalley. Commenting on the survey, he said:
“‘What a Difference a Day Makes’ sang Doris Day in the 1960s. How true – especially of the 23rd June. The last quarter’s QES results in many respects give out a sense of weakening for want of a better word. In normal circumstances we might consider this as part of the normal ebb and flow. But we aren’t in ‘normal’ circumstances. In many respects the more interesting, and relevant, results will be seen in the surveys yet to come.”
Babs Murphy, Chief Executive of the North & Western Lancashire Chamber, added:
“It is too early to say what impact the referendum decision has had on most firms, as we have as yet had only anecdotal evidence from those facing challenges, those holding steady, and those seizing new opportunities. At a time of great uncertainty, policymakers must get back on the front foot with a detailed plan to help navigate the UK economy through increasingly choppy waters, including much needed support for our exporters.
“Business confidence would be buoyed by strong and clear leadership, both on the timeline for EU negotiations and on the big decisions unrelated to our future relationship with the EU.”
Download the report: Q2 2016 – Report