Norfolk economic recovery gathering strength, but risks remain
- BCC’s Quarterly Economic Survey for Q2 2013 shows further progress, with many of the key balances in Norfolk stronger than in Q1 2013.
- Manufacturing export orders figure in Norfolk exceeded the balances of both the East of England and the overall national figure.
- Service export orders, despite a small drop is still showing a strong balance, which continues to be higher than the national level.
- Norfolk business remains resilient, and confidence is rising, despite most balances remaining below their pre-recession levels in 2007
- Caroline Williams: “The sheer strength of our export balances shows that companies have untapped potential to expand. It must be recognised that recovery will only be turbo-charged if we can create a truly enterprise-friendly economy in Norfolk.”
The British Chambers of Commerce’s Quarterly Economic Survey (QES) released today (Tuesday) shows that the economy has made further progress, but that there are still some risks at home and abroad that could derail the recovery. The new survey, made up of responses from over 7,400 businesses, shows that many key balances strengthened in Q2 2013 compared with the previous quarter.
The export levels remain strong, with manufacturing export orders figures showing a strong increase which exceeds not only the East of England levels, but the national figures as well. The service export orders, despite a small drop, still showed a strong balance, which was matched by the East of England figures and exceeded the national total. It is encouraging that, despite the dip in employment levels from the last quarter, both sectors are expecting to recruit more staff over the next 3 months. Despite these welcome improvements, it is disappointing that cashflow remains weak and the service investment balances fell in the quarter.
The findings suggest that the economy will continue to strengthen gradually over the next year, with growth slowly improving. The results also demonstrate resilience among Norfolk businesses, who continue to feel confident and are looking to invest and increase exports this year.
Key Norfolk findings in the Q2 2013 BCC survey:
- Norfolk manufacturing export figures remain strong, with both sales and orders increasing this quarter.
- Service sector export balances in Norfolk dipped but are still showing robust figures, which are considerably higher than the national levels.
- Both sectors have tried to recruit over the last 3 months and both are forecasting more recruitment over the next 3 months.
- The manufacturing sector’s business confidence in both their turnover and profitability has increased and they are investing in plant and machinery and training.
- The service sector’s business confidence has dipped, which is also reflected in their lack of investment in plant, machinery and training.
- Cashflow remained weak for both sectors, with the negative figure for manufacturing falling still further from a negative position of -7% to -17%. The service sector fell from 0% to -11%.
- Overall, the Q2 results support our view that the economy will gradually strengthen over the next year, but many challenges remain.
Commenting on the results, Caroline Williams, CEO Norfolk Chamber of Commerce, said:
“Despite gloomy media headlines in recent months, our economic survey once again shows increased, but cautious business confidence. Norfolk firms are determined to make progress.
“It is incredibly encouraging to see export deliveries reach high levels, and the expected upturn in employment balances is reassuring in spite of the risks at home and abroad. However the falls in the service investment balances and the weak cashflow balances in both sectors are a warning that economic growth could be slow, and a reminder that a sustained upturn cannot be taken for granted. For these reasons, business access to finance, and working capital in particular, must be assured.
“Norfolk firms are doing their utmost to drive recovery. The sheer strength of our export balances shows that companies have untapped potential to expand. It must be recognised that recovery will only be turbo-charged if we can create a truly enterprise-friendly economy here in the Norfolk. That, in turn, requires more support for exporters seeking to enter new markets, far more action on finance for growing companies, and support and commitment from the government to enabling the private sector to generate wealth and prosperity.