The results of the latest Quarterly Economic Survey (QES) from the Chamber of Commerce show that economic conditions were worryingly subdued in the final quarter of 2018, with a number of key indicators continuing to weaken under the weight of persistent Brexit uncertainty and rising cost pressures.
The Q4 2018 survey, compiled by the county’s three Chambers of Commerce in association with MHA Moore and Smalley Chartered Accountants and Business Advisors, reveals a significant slow-down in domestic sales and orders for the service sector, which is the main driver of the economy and makes up two-thirds of responses to the survey. The slow-down in sales has also affected business confidence in the sector, with expectations that turnover and profitability will improve in the coming year taking a backward step.
The downturn in business confidence is also reflected in a weakening employment picture for both manufacturing and services firms. Despite this, over half of the firms in the survey attempted to recruit during the last three months of the year with 74% of manufacturers reporting difficulty recruiting skilled manual workers.
Commenting on the results, Alan Welsh Policy Manager at the North & Western Lancashire Chamber said:
“In this new year, the government must demonstrate that it is ready to act to turbo-charge business confidence. With little clarity on the trading conditions they’ll face in just two months’ time, companies are understandably holding back on spending and making big decisions about their futures. The government’s absolute priority now must be to provide clarity on conditions in the near term and avoid a messy and disorderly Brexit.
“Skills shortages continue to be a major concern for Lancashire businesses and we urge the government to proceed with caution over changes to immigration policy as we leave the European Union. Companies must be able to access skills at all levels without heavy costs or bureaucracy.”
The results from the Chambers of Commerce survey were revealed to an audience of local businesses at Preston’s College this morning (Thursday 10th January) by Stephen Gregson, Corporate Finance Director at MHA Moore and Smalley. Commenting on the survey, he said:
“This latest set of results indicate a marked weakening in performance and sentiment on the prior quarter and 12 months ago but we should not rush to judge this too pessimistically. The purpose of the QES is to stimulate thought and prompt us to ask ‘Why?’ the survey results are what they are. There may be some cohort effect at play here, but I think the bigger factor is the “B” word.
“Brexit, and whatever form it might take, has been the primary focus for a lot of the the media in the run up to the survey. The shrillness of much of this comment has, I would suggest, had a not insignificant impact on the mood of the business community; and we are seeing that sense of uncertainty and anxiety manifest itself in the results. In relation to the economy I increasingly come to the conclusion that things are rarely as bad as we fear – nor are they likely to turn out as well as we might hope.”