The results of the latest Quarterly Economic Survey (QES) from the Lancashire Chambers of Commerce has found that economic conditions weakened in the third quarter amid a significant deterioration in manufacturing sector activity.
The Q3 2019 survey, compiled by the county’s three Chambers of Commerce in association with MHA Moore and Smalley Chartered Accountants and Business Advisors, points to an economy sagging under the weight of relentless uncertainty, another looming Brexit deadline, and deteriorating global economic conditions amid heightened trade tensions.
In the manufacturing sector, there was a marked downward shift in many indicators in the third quarter. The balance of firms reporting increased domestic sales dropped 19 points on the previous quarter and was at its lowest level since Q2 2016. It was a similar picture for export sales, which also reached a 3-year low and was well below historical levels for this survey.
Employment prospects have also shown signs of weakening this quarter. All four of the retrospective and forward-looking employment balances were down on Q2 levels, with manufacturing firms worst affected. Business confidence in both sectors has also weakened considerably, with firms far less optimistic about their turnover and profitability expectations for the coming year.
Manufacturers reported that their cashflow position – a key indicator of the financial health of a business – has deteriorated. In the services sector, cashflow held steady, but remains low by historical standards.
Commenting on the results, Alan Welsh Policy Manager at the North & Western Lancashire Chamber said:
“Whilst there are a lot of good things going on in the Lancashire economy there can be no denying that this is a very disappointing set of results. The manufacturing sector in Lancashire has been performing above the UK average for some time, according to our survey results, but this quarter we have slumped in line with the rest of the country.
“The results further highlight the need to get Brexit done as quickly as possible, preferably in an orderly way, alongside bold measures to stimulate investment and confidence across the country. The strains of acute uncertainty are hitting businesses, and particularly manufacturers, hard.”