Quarterly Economic Survey
The British Chambers of Commerce Quarterly Economic Survey is the largest and most representative independent business survey of its kind in the UK covering a substantial percentage of small businesses and the subsidiaries of large businesses.
The Quarterly Economic Survey (QES) is the UK’s largest private quarterly survey of business. Each quarter, over 5,000 businesses – belonging to Chambers of Commerce in every region of the country – participate in the QES. Businesses are questioned on a wide range of issues, including: home sales and orders, export sales and orders, employment prospects, investment, recruitment difficulties, cash flow, confidence and price pressures.
The QES is the first economic indicator of the quarter, published in advance of official figures and other private surveys, and it consistently mirrors trends in the national economy. For this reason the survey is closely watched by policymakers such as the Treasury and the Bank of England, as well as the media. The Monetary Policy Committee has made it clear that they pay huge attention to the QES and that this, and meetings with British Chambers of Commerce have been very influential in their decisions to cut interest rates significantly in recent months.
Results in quarter four (Q4) of 2009 for the North West region reveal the following:
Manufacturing
· UK order bookings and sales improve
· Upturn in export sales and bookings
· Investment plans for plant & equipment increasing
· Confidence in improved turnover and profitability show significant increases
· Concerns have further increased over raw material prices
The UK sales balance for manufacturers moved from -16% in Q3 to 0% in December and is the best since mid 2008, while UK orders showed a significant improvement moving from -22% to 5%. Export orders and sales also showed positive movement, with orders improving from -13% to 10% and sales moving from -14% to 7%.
On recruitment, during the last three months the number of businesses reporting net job losses has reduced, though there has been an increase in recruitment for part time and temporary positions.
Cash flow continues to be a concern for manufacturers, however there has been a positive movement in plans for investment in plant and machinery from -1% to 7%.
Building on the more positive position, manufacturing confidence also continued to improve moving from 28% to 41% for turnover and 8% to 23% for profitability.
Raw material prices remain the main concern for manufacturing businesses in terms of price pressures, whilst the external factors exchange rates and competition also remain of concern.
Services
· Overseas sales improve and orders are flat
· A slight upturn in UK sales
· Optimism in new job creation
· More investment in training
· Overall business confidence remains steady and positive
· Concerns over business rates remain and other overheads exerting pressure on prices
Overall sales showed a major upturn from -11% in Q3 to 8%, whilst export orders remained flat this quarter, moving from -12% in Q3 to 0%. Again, although fragile this was the best balance since early 2008.
Recruitment over the past three months has improved with 34% of employers trying to recruit, while the forecast over the next three months is for recruitment to improve from a net balance of 0% to 7%.
Cash flow and investment plans continue to be a concern, although showing some improvement from -21% to -18% for cash flow and -8% to -5% for investment in plant and equipment. However on a positive note investment in training has seen a further improvement moving from 2% to 9% this quarter.
Nevertheless confidence for the next year remains positive for both turnover (31%) and profitability (16%). However price pressures remain with raw material costs and other overheads being the most prominent, whilst external pressures from competition and business rates are of most concern to service businesses.
The Cumbria results show the following:
· 54% of businesses saw improved turnover, an increase of 12&
· 44% of businesses saw a rise in profits
· 78% saw sales increases or hold firm over the past three months
· 83% of businesses maintained the size of their workforce, and 73% expected to maintain this over the next 3 months
· Only 10% had cut staff compared to 23% in the first quarter of 2009
To view QES findings, click on the links below:
