Better news for Northants business, as service sector sales pick up
Services sector firms are reporting improved UK sales again, according to the results from the Quarter 2 2010 Northamptonshire Chamber Quarterly Economic Survey (QES). Bouncing back, somewhat, from the poor sales figures of the previous quarter, well over a third of services companies are reporting increased domestic sales, a rise of 17% on last quarter’s figures.
Manufacturers have chalked up yet another quarter of improvement, with incremental growth in sales at home (over half declaring increases) and over a third of firms (36.4%) citing rises in orders abroad. Export sales and orders for the services sector firms remain steady, with around two-thirds of businesses saying their activity abroad has “remained the same” for the past quarter.
Commenting on the results for the second quarter of the year, Paul Griffiths, chief executive of Northamptonshire Chamber said:
“These results make much more encouraging reading, with UK sales for the services sector back into positive territory again, bouncing back from the start of the year. Our local manufacturers are continuing to do well at home and abroad, which is excellent news – and it looks like their services counterparts are beginning to catch up.”
Used by public and private sectors as a barometer of what’s happening in the local economy, the survey shows the situation to be more optimistic on the jobs front – with over a quarter of manufacturers (26.3%) stating workforce numbers have increased over the last three months, and the same percentage of services firms expecting their staff to increase over the coming quarter.
Cashflow still appears to be a problem for a significant number of businesses, and a particular low point for services amongst otherwise encouraging statistics for the sector: over a third of services companies (34.4%) said that their cashflow had worsened over the past three months. Examining the problem in greater detail, the Chamber survey asked Members what factors most affected their cashflow; across the board local businesses cited “promptness of payment/credit control” as the main problem, closely followed by “stronger/weaker sales than anticipated”.
Reacting to these results, Mr Griffiths said:
“The negative cash flow balances in the services sector indicate that despite some encouraging results, businesses are still operating in the face of considerable financial pressures. Our Members are telling us that they are finding some of the extended payment terms from multinationals and larger companies are exacerbating this situation – as one company put it “I have to pay my staff three times in the length of time it takes one of my customers to pay me!”
“Businesses will be encouraged by the recent budget, however, with the announced cuts in corporation tax and a partial retraction of the anticipated rise in National Insurance contributions, which is maybe why we’ve seen an improving picture for both sectors in terms of the survey’s confidence measures.”
Posted by: Northamptonshire Chamber
