POLITICS
Third major vote in two years must not distract business
The General Election in June must not be allowed to become a major distraction for business. Having survived a General Election in 2015
and the EU Referendum last year, businesses in the East Midlands have enjoyed something of a mini-boom in the nine months since the Brexit vote. They have flown in the face of predictions of
doom and despair, boosting the Chamber’s State of the Economy Index to its highest level in two years, the growth driven by the fall in value of Sterling making UK-made goods and services cheaper overseas. For the first quarter of 2017, the measure of
business confidence and success stood at 375, only eight points below its Q2 2015 level and nearly 100 points higher than just before the EU Referendum last June. The Index is based on the net results of
responses given by business to repeat questions in the Chamber’s Quarterly Economic Surveys, the latest of which (Q1 2017) was carried out between 20 February and 10 March. It showed a rise in the net variance of firms
reporting increased sales in the UK (up from 27 to 29) and overseas (up from 14 to 23). Confidence levels were also higher with an
increase in the variance of firms expecting improved performance in the next three months in the UK (up from 23 to 27) and overseas (up from 18 to 26). And the variance in the number of East Midlands firms expecting turnover (up from 51 to 67) and profitability (up from 30 to 49) to increase this year was also higher in the first three months of 2017 than in the final quarter of 2016. The net variance in the number of firms
reporting intentions to invest in equipment rose
‘The recently called General Election on 8 June has the potential to create more short-term uncertainty’
26 business network May 2017
from ten to 15 and those with intentions to invest in training went up from 18 to 29. There was also a boost in employment with
the net number of firms reporting increased staffing levels up from 19 to 23 and those expecting to take on more personnel rising from 20 to 38 net. However, finding suitably skilled staff remained
the single second-biggest issue for responding firms with 63% reporting difficulties compared with 56% in Q4 2016. The most serious concern looking
ahead, according to the Q1 2017 QES, was inflation, which leap-frogged the Q4 2016 QES top concerns of business rates and exchange rates.
Chris Hobson (pictured), the Chamber’s Director of Policy, said: “What these figures confirm yet again is that the East Midlands economy has remained robust and far from falling into the mire of doom and despair predicted by many in response to Brexit has enjoyed nine months of mini-boom. “We know there are inflationary pressures that
can potentially hinder growth. Firms are already beginning to report squeezed margins but despite that we can see, on the whole, that business remains confident and plans to invest in equipment and training. “Business in the East Midlands had all but
conquered the initial fears over Brexit and coped with the fall in the value of Sterling, however, the recently called General Election on 8 June has the potential to create more short-term uncertainty. “Business hates uncertainty and this is a
distraction that it doesn’t need while trying to strategise for life outside the EU without knowing yet what deal will be on the table. “What is really important now is that all
political parties clearly articulate what they stand for. There are a multitude of domestic issues that need to be managed and we would call on all candidates to make clear to business
what their plans are for strengthening the economy now, during Brexit negotiations and post-Brexit.” In particular, business needs to know what is
going to happen with regards to the Industrial Strategy Green Paper, consultation for which ended on 17 April. The Chamber has submitted a formal response
to the consultation, based on feedback from members at a number of events across the three counties. And it has called on Government – whatever its persuasion after 8 June – to make addressing the skills gap its top business priority. “To develop an economy fit for
the future, it is essential that we focus on addressing the skills gaps within the high productivity sectors where we perform well, such as engineering and manufacturing,” the Chamber’s
response said. The second most important
consideration for implementation of an
Industrial Strategy was found to be improving transport infrastructure at intra- and inter- regional levels. “Our central location and availability of land
provide opportunities for connecting to the rest of the UK and internationally that other areas do not have,” said the Chamber’s response, adding: “Unsurprisingly, this has resulted in strong transport, logistics and distribution sectors based in the East Midlands. “Situated between our three largest cities,
East Midlands Airport is the UK’s largest pure freight airport, a new Strategic Rail Freight Interchange is currently being developed and we are planning for the future arrival of an HS2 station at Toton. It is essential that the opportunities these bring are maximised.” The third priority was Government backing for
businesses looking to exploit opportunities presented by the weaker pound, which has made UK-made goods cheaper overseas. Finally, the response urged Government to
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