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Local improvements in economy again, but slow progress

Posted: 20/01/10 by Northamptonshire Chamber

The results of the Chamber’s Q4 2009 Economic Survey, released mid-January, showed improvements in most key indicators, and a particular boost for manufacturing. However, progress has generally been weaker than it was in the third quarter of last year.

When asked for their perceptions of sales & orders at home and abroad, local firms reported better signs, with 42.9% of manufacturers UK sales up and 30% of the same sector saying, encouragingly that their export trade had grown.  Almost a half (47.2%) of services firms said domestic orders/bookings for the next three months were up, up on the previous quarter by 8.1 percentage points.

The results support the view that in common with the national evidence, the Northamptonshire economy appears to be on the brink of leaving recession, but they do not provide conclusive confirmation of any robust and significant growth during the fourth quarter of 2009.

There was better news on employment in the Quarter 4 jobs picture seems to be improving, with around quarter of firms in both sectors expecting workforce numbers to grow in next three months.   And, business confidence measures (i.e. considering turnover and profitability anticipations for the next 12 months) look to be generally improving across the board, though there was a worrying dip in manufacturers’ profitability confidence, from the previous quarter’s more optimistic stance.

Lastly, the survey showed there may still be a need to improve business access to bank finance, especially for services firms, with Q4 cashflow balances still in negative territory for the sector.

Commenting on the results, Paul Griffiths, Chief Executive of Northamptonshire Chamber, said:  

“Businesses are showing resilience despite difficult and uncertain trading conditions. Confidence is improving, and the boost in exports must be nurtured in order to strengthen the county’s trade position globally.

“It is vital that the government now demonstrates a determination to support wealth-creating companies in 2010.  Despite the need to plug the massive gap in public finances, resorting to additional business taxes is not the answer.  For instance, the Chamber wholeheartedly believes that the increase to employers’ National Insurance Contributions planned for 2011 should be scrapped.

”Unless the private sector is given the freedom to create jobs and wealth, the UK’s economic recovery will be slower than it should be, and we will face the serious risk of a double-dip recession.”

To download the report in full in pdf format, or to look at previous QES reports click here

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