Suffolk Chamber of Commerce’s Quarterly Economic Survey (QES) for July to September has shown the worst set of figures since the start of the Covid-19 pandemic in the second quarter of 2020.
Fieldwork for the survey took place in the weeks leading up to the government’s fiscal event, so do not reflect the reaction of the chamber’s members to its provisions – and the reactions to it.
Virtually all of the business indicators measured fell compared with the figures for the same indices in the second quarter.
The biggest declines for manufacturers among measures of current business activity were in export sales and orders (down 49 percentage points), investment in plant and machinery (down 28 percentage points) and employment expectations (down 22 percentage points).
Service companies generally recorded more muted declines, although they did experience very high contractions in domestic orders (down 35 percentage points) and domestic sales (down 31 percentage points).
All export balances are now deep into negative territory (with more firms experiencing reductions than those enjoying increases).
The third quarter also saw across the board declines in firms’ cashflow situation – with both tipping into negative territory (where more companies reporting cashflow declines than increases). Cashflow for manufacturers is now at -4% and that for service firm -9%.
Investment in staff training, regardless of market sector, has fallen for the third consecutive quarter with manufacturers showing a drop of nine percentage points and service firms one of 21 percentage points.
There were also sharp decreases in the survey’s various confidence measures, including future turnover predictions (down 26 percentage points for manufacturers and 31 percentage points for service firms) and profitability forecasts, which now stand at -21% for manufacturers and -15% for service companies.
A total of 91% of respondents said they were concerned about the impact of inflation on their business, with 37% (up 11 percentage points) mentioning interest rates as a worry. The numbers referencing corporate taxation fell slightly, but was still referenced by 31% of Suffolk Chamber members.
Paul Simon, head of public affairs & strategic communications at Suffolk Chamber, said: “The data from this survey shows that businesses are on the brink of really difficult times and are looking to the government to help stabilise the longer-term economic outlook to allow them to rejuvenate their investment plans.
“Suffolk Chamber welcomed the government’s recent decision to reverse the increase in NI employer contributions and the shelving of proposed increases to Corporation Tax rates. These were our key policy asks and their implementation will offer some relief to our hard-pressed members.
“But we are looking to the government to think beyond the next electoral cycle and institute an infrastructure and skills boosting programme for the longer-term.
“Suffolk has the pivotal role in unlocking this country’s true potential. It is vital now that the government invests in upgrades at Ely and Haughley rail junctions, improves the whole of the A14 in the county – and not just one or two junctions and ensures that we are at the front of the queue in terms of 5G infrastructure.
“A purposeful programme of infrastructure upgrades will be like a magnet in drawing the skills base of Suffolk in an upwards direction, including through the Suffolk & Norfolk Local Skills Improvement Plan which is being run by Suffolk and Norfolk Chambers of Commerce.”
Suffolk Chamber is grateful to Suffolk Knowledge, part of Suffolk County Council, for providing the analysis of this QES.