Welcome to the quarterly economic report for quarter four of 2020. This has been a challenging quarter, and year, for business communities both regionally and nationally. The pandemic has hit all industries hard, with financial pressures and the inability to plan ahead being disastrous for some. Sadly, many jobs have been lost and livelihoods destroyed as a result of the Covid-19 crisis. High streets and city centres are unlikely to return to the bustling, vibrant places we once knew, as online and digital ways of working have taken over, in some roles and industries, this move will be permanent.
However, despite these troubling changes, pin pricks of light are beginning to show at the end of the tunnel. The manufacturing industry has seen an upsurge this quarter, along with professional services, and things are also looking up for the unemployed as businesses are looking to recruit once more. Business confidence is also strengthening, with the outlook for the next year heading back towards pre-pandemic levels. We have not yet made it through this crisis, but with confidence growing, some sectors beginning to bounce back, and the rollout of a vaccine, we have reasons to be cautiously optimistic.
(Martin Hathaway, Managing Director)
DOMESTIC SALES AND ORDERS – Manufacturing sales rose in the last quarter back into growth territory with more companies reporting increase than decreases for the first since 2019. Sales for B2B services also grew to +7% but overall the sector net balance remains negative with consumer services including accommodation, leisure and hospitality all reporting declining sales, not unsurprisingly.
EXPORT SALES AND ORDERS – Export sales also improved in the last quarter and may in part be down to customers bringing forward orders for products or services ahead of EU transition period ending on December 31st. Overseas markets in the Far East and China are also improving but concerns over increased shipping costs and capacity being raised by businesses.
EMPLOYMENT – Last quarter saw net balance negative across all sectors, however the outlook for next quarter looks a little more promising as companies report expectations of increasing headcounts.
INVESTMENT – Manufacturing investment improved during Q4 and although still some way off pre-crisis levels is back into positive territory. In part this maybe also link back to the end of the EU transition period as companies look to get projects completed ahead of any new border controls.
BUSINESS CONFIDENCE – Manufacturers reported a big increase in both turnover and profitability expectations in the last quarter with both measures at levels last seen in 2018 and 2019 respectively. Rising costs for manufactures are anticipated and many companies reported that they expect to pass these on to customers rather than take a hit to already challenging cash reserves. Service sector confidence overall also bounced back to pre-crisis levels although there are degrees of variation as you would expect depending on which part of the economy businesses serve
The Quarterly Economic Survey is a regular snapshot of key information, such as local business activity, confidence and issues, which policy makers and government ministers use to inform their decisions and thinking. We incorporate statistics, based on data contributed by members, on sales, orders, export, employment and the impact of economic factors such as inflation and exchange rates to provide ministers with an accurate and up to date analysis of business in the Mid Yorkshire region.
If you want to see change and influence policy on the business issues that are important to your business then you need to ensure that you are feeding the information into the system. Participating in the QES is an effective strategy to have your voice heard by those who can do something about the business issues you care about.
Every quarter, we encourage Chamber members to participate in the online survey. All responses are anonymous so you can speak freely (if you wish to speak openly and directly to policy makers you should consider attending our Area Council Meetings). We analyse this data to create the QES report which is then sent to key government departments and financial institutions such as The Treasury and The Bank of England. The QES Report is also a very useful resource to inform your own business. To have your say please compete the survey here.
The Mid Yorkshire Chamber and British Chambers of Commerce not only have the ears of policy makers but actively lobby government and demand a response. We regularly speak out through the media, both locally and nationally, on these issues because we are the voice of the British business community.
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