POLITICS
Businesses look to a new decade with confidence
After a prolonged trading period dogged by uncertainty and political inertia, it’s no surprise that the region’s economic performance was underwhelming in 2019. But, with a majority Government now in place and Brexit finally put to bed, can businesses afford to look ahead with confidence? Business Network takes a closer look at the findings of the Chamber’s latest Quarterly Economic Survey to see how the future is shaping up.
Uncertainty became a watchword which has dogged the UK’s economy ever since the results of the EU Referendum became clear in the early hours of that fateful June morning in 2016. It represented a seismic shift for the country
as a whole, with some looking at it as a brave new world and others claiming the end was nigh. The reality, as always, lay somewhere in the middle. Since then, however, the country and the
economy entered a perpetual state of inertia as politicians argued about the best way forward and the date of our actual departure was under constant revision. The impact on the economy was stark. Like everywhere, businesses in Derbyshire,
Nottinghamshire and Leicestershire were not immune. Our businesses, as they always do, simply knuckled down and got on with things as best they could, in spite of the political uncertainty surrounding Brexit and turbulence in the global economy. Despite not having the luxury of clarity to
base their decisions on, they kept things ticking over to ensure that while it might not have been motoring ahead, the regional economy was still moving forwards. 2019 was perhaps emblematic of the general
malaise shown in the wider economy, despite the best efforts of business to keep calm and carry on. The performance of the economy throughout
2019 was again underwhelming, characterised largely by the UK’s ever-changing but never- realised departure from the EU, which had a material impact on the decisions being taken by customers and business owners alike. It meant that businesses in our region ended
the year pretty much as they had started it, unclear on the direction of travel in terms of business policy and Brexit. This was the picture painted by the findings of
the Chamber’s latest Quarterly Economic Survey, for Q4 2019, which captured business sentiment in the run-up to December’s General Election and before the Withdrawal Bill was passed. Advanced orders slowed in the final quarter of
the year, particularly in the manufacturing sector, while any growth in overseas activity remained modest.
56 business network February 2020 Longer-term confidence softened quarter-on-
quarter for turnover expectations and remained flat for profitability. There was an increase in those seeing their
workforce grow over the past quarter, however there was a decrease in those expecting to grow employee numbers over the coming quarter. Meanwhile, there was a sharp increase in
those experiencing the perennial issue of sourcing and recruiting the right employees, especially in unskilled or semi-skilled roles. However, Q4 delivered reasons for optimism
ahead of a year that, on the face of it, should offer a more stable and certain business climate. Following a poor Q3, sales activity improved
towards the end of the year, while cashflow recovered, returning to positive territory. Encouragingly, there were also tentative signs
of positive investment intentions, as the contraction of Q3 gave way to a more positive picture of businesses looking to invest heading into 2020. The election gave the Government a new,
strong working majority and with it, the mandate to start getting things done. The Withdrawal Bill was finally passed before
2019 drew to a close, bringing to an end the deadlock in Westminster and providing some relief for business. Businesses should now be able to count on a
more stable, certain year in which to plan – although it’s just the first step on a long road ahead.
Challenges undoubtedly still remain, but it will
be interesting to see how a more stable political climate will impact the findings for Q1 2020. There are strong messages coming out of
Downing Street around the need to “level-up” and support the regions of the country – like the East Midlands – that have previously not benefited as strongly from Government investment and focus. A key early test for what this means in
practical terms will come on 11 March, with the Treasury’s Budget, which provides a golden opportunity for Government to show it is serious about investing in our region and giving the East Midlands the backing it needs – and deserves – to prosper. The Government must use its newfound majority to take big decisions to stimulate
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