POLITICS Results from QES:
businesses stay strong
The regional economy remained robust during the second quarter of the year despite the uncertainties of Brexit and a second General Election in two years. Confidence might have dropped slightly, but,
overall, East Midlands businesses remain bullish about future prospects, according to the latest research by the Chamber. Recruitment remains a perennial issue for
employers and there are still concerns over future price rises and the impact they could have on margins. But according to the Chamber’s Quarterly
Economic Survey for Q2 2017, the future is not as bleak as some suggest. A summary of the results of the survey, which
was completed by 359 regional firms, showed 43% of respondents (44% in Q1) reporting growth in domestic performance in the second three months of the year and 40% expecting improvements in the third quarter (39% in Q1). The net figure, the difference between those
reporting a positive outcome or expectation and those feeling less bullish, was 23% for Q2 domestic performance (29% for Q1) and 25% for the third quarter (27% previously). A similar picture emerged for performance in
overseas markets. The significant growth recorded in the post-Brexit referendum period of 2016 continued unabated in both the first and second quarters of 2017. Respondents were generally positive when
forecasting future export performance, with a net 14% predicting increased orders over the coming three months. While this figure is encouraging, it does mark a fall in confidence from three months earlier when 26% said they expected improved overseas performance. The volatility of exchange rates, exacerbated
by the hung Parliament resulting from the June general election, continues to inhibit the ability of exporters to plan ahead. Although advantageous for companies
manufacturing in the UK and exporting internationally, the relatively weak pound brings significant challenges for companies importing to export. With continuing political uncertainty, almost
two-thirds of respondents (63%) said they expected prices to remain about the same over the coming three months but a third (32%) said they expected prices to rise in the short term, suggesting continued upward pressure on inflation as the year progresses. Rising costs of certain imported raw materials,
the result of the weakened pound, has seen inflation rise to 2.9%, a rate not seen since Q2 2013. A continued fall in fuel prices and sluggish wage growth were responsible for inflation not rising further.
26 business network July/August 2017
‘It is essential that we inject momentum into major local and national infrastructure schemes that have already been agreed’
With inflation expected to continue through
the latter stages of 2017, the evidence suggests companies are absorbing price increases where possible but, in many cases, they expect eventually to pass the burden to customers. Business confidence in respect to both
profitability and turnover remained relatively robust in Q2 2017, in the face of significant external uncertainty. Two-thirds (67%) of respondents said they
anticipated turnover would increase in the coming three months, although this was down seven points lower than the 74% who expressed confidence in turnover in Q1 2017. The outlook for profitability was similarly
buoyant, with 57% expecting profitability to increase in the short-term. This was also seven
points lower than in Q1 2017. The proportion of respondents expecting profitability to remain the same in the coming quarter increased by nine points from 21% to 30%, suggesting that while companies are not pessimistic when considering the future, there is a decline in optimism. Business rates and corporate taxation were
two of the most often-cited concerns companies had in Q2 2017, highlighting the impact that disparate policies put forward by political parties during the fervour of an election campaign can have on business confidence. A net 19% of respondents reported intentions
to increase investment in equipment in the short-term, a modest increase from the 15% reporting similarly in Q1 2017 and further evidence of a consolidation in investment intentions since the marked drop observed in the wake of the 2016 referendum. The overwhelming majority of respondents
(67%) anticipated investment intentions would remain the same in the short-term, with only seven per cent of companies expecting investment to fall. In respect of investment in training, a net 19%
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64
