Quarterly Economic Survey: Norfolk Businesses confident, but growth remains weak

  • BCC’s Quarterly Economic Survey for Q4 2012 shows progress, with almost all major balances across the UK improving since Q3. 
  • Norfolk businesses are ambitious, and confident the economic outlook will improve in 2013
  • Although they are stronger, many key balances are still low by historical standards, indicating that growth remains weak.
  • “It is a new year and time for a new chapter in our economy”, says John Longworth, BCC’s Director General.

The latest Quarterly Economic Survey released today (Tuesday) by the British Chambers of Commerce (BCC) shows that the economy improved in the fourth quarter of 2012, with stronger balances seen in both the manufacturing and service sectors. The new survey, made up of nearly 8,000 business responses, shows that UK firms are confident and ambitious, but also indicates that growth remains weak and there are still economic challenges ahead.

Commenting on the results, John Longworth, BCC’s Director General, urged the government to take bold and imaginative measures to boost growth that will help businesses of all sizes to deliver a lasting recovery throughout 2013 and beyond.

The Norfolk results show the following:

  • Balances for the manufacturing sector improved in Q4 compared with Q3. 
  • Balances for the service sector also showed improvements, although the service sector results were not as strong.
  • Norfolk Manufacturing export sales and orders improved, with deliveries increasing from 27% to 33% and orders from 30% to 42%.  These results were reflected in the East of England results, both of which were stronger than the national results.
  • Service sector export deliveries and orders showed a decline from the previous quarter.  Deliveries contracted by 10 points and the orders by 3 points. 
  • Both sectors reported a lack of recruitment, with the manufacturing sector balance reducing from 62% to 52% and the service sector falling from 59% to 44%.
  • Manufacturers’ confidence in their profitability rose by 17 points to 35%, but service sector confidence dropped slightly from 37% to 33%.
  • Service sector investment strengthened by two points to 5% in plant and machinery, and by four points to 14% in training in Q4.  Despite these gains the results are still relatively weak.
  • In contrast, manufacturing investment in plant and machinery decreased by 9 points to 6% and similarly training was also down by 12 points at 11%.
  • Cashflow balances, though higher, are weak overall, despite the service sector’s improvement of from a negative -11% to a positive 4%.  Manufacturing’s cashflow balance remained the same at 5%.
  • Plans to raise prices have increased in both sectors.   The manufacturing sector showed an increase of 4 points to 32% and the service sector a considerable increase from 19% to 33%.
  • Both the manufacturing and the service sectors highlighted continued concerns about raw material prices, pay settlements and business rates.

Commenting on the results, Caroline Williams, CEO of Norfolk Chamber said:

Norfolk businesses are working in an increasingly difficult market place with raw material costs being identified as one of the key challenges to many businesses.  Businesses in both the manufacturing and the service sectors are showing reluctance to invest in their businesses and to create new jobs when their customers are demonstrating real caution in their buying patterns.  Overall there is a quiet determination within the Norfolk business community to develop their businesses, which will in turn help the Norfolk economy to grow in 2013.

Commenting on the results, John Longworth, Director General of the BCC, said:

“Our survey results show that the economy is making progress, despite the numerous challenges it has faced. Although the improvements we have seen are slight, it is progress nonetheless, and highlights the determination and ability of the businesses we have here in the UK. Despite rising business confidence that the outlook will improve, it is clear that economic growth remains weak and that nurturing it must be a top priority.

“The UK economy will continue to face major obstacles as we head into 2013, and every effort must be made to kick-start growth. Politicians can make a difference to our economic success, as they have the power to deliver bold and imaginative measures that will drive growth. The question is whether they have the guts to do it.

“It is a new year and the time for a new chapter in our economy. The government must build on measures announced in the Autumn Statement and deliver a strategy that combines deficit reduction with a realistic long-term growth plan, including immediate measures to support business confidence.

“Recent steps to improve access to finance, such as the commitment to create a business bank, must be implemented at scale and with clear timetables. More forceful measures are also needed to unlock massive private funding to renew Britain's infrastructure that will create confidence in the short-term, jobs in the medium-term and growth in the long-term. But this will only work once we free up the planning system at national and local levels, and defeat the culture of NIMBYism that prevents many business projects getting off the ground.”

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