The results of the latest Quarterly Economic Survey (QES) from the Chamber of Commerce shows that the Lancashire economy grew at a muted rate in the third quarter of 2017.
The Q3 survey, compiled by the county’s Chambers of Commerce in association with Moore and Smalley Chartered Accountants and Business Advisors, indicates another strong quarter for manufacturing firms both in terms of UK and overseas sales.
However, export orders have weakened and this will give further cause for concern following the recent announcement by British Aerospace to streamline their operations in Lancashire. The results also reveal a sizeable drop in the proportion of manufacturing firms reporting increased workforce levels in Q3.
In the services sector, the main driver of the economy, the percentage of firms reporting improved domestic sales and orders increased marginally on the second quarter of 2017. However, most other measures including export sales, employment expectations and business investment remained static or saw muted growth in the third quarter.
The latest results also confirm that rising costs remains a worry for businesses, particularly in manufacturing. However, while still high by historic standards, the easing in a number of indicators of pricing pressures since the start of the year suggests that inflation will peak sooner rather than later, possibly by the end of the year.
Commenting on the third quarter results, Alan Welsh, Policy Manager at the North & Western Lancashire Chamber, said:
“The slightly disappointing results in our third quarter findings reflect the fact that political uncertainty, currency fluctuations and the vagaries of the Brexit process are continuing to weigh on business growth prospects.
“There is clear evidence from the Lancashire survey that business investment is slowing, cashflow is worsening and that employers are having difficulty recruiting skilled workers. However, there is also a healthy optimism that turnover and profitability will improve in the year ahead.
“While much of Westminster and Whitehall is distracted by Brexit, business needs action now on the home front. The solutions to some of the biggest issues currently facing our firms – including high up-front costs, a lack of incentive to invest, and a need for better infrastructure – are entirely within the power of the UK government to deliver.”
The results from the Chambers of Commerce survey were revealed to an audience of local businesses at Preston’s College this morning (Tuesday 17th October) by Stephen Gregson, Corporate Finance Director at Moore and Smalley. Commenting on the survey, he said:
“Once again a thought provoking set of results. Given the uncertainties which abound at the micro and macro level, in many respects we can draw a sense of balanced realism from our respondees. You would have to look hard for any sign of fearful pessimism – and I don’t think that you would find it based on the evidence of this quarter.”