The British Chambers of Commerce’s quarterly economic survey shows key indicators weakened considerably in early 2019.
- The balance of services firms reporting a rise in export sales at its lowest level in a decade
- The balance of firms reporting improved cashflow turned negative for the first time since 2012
- Investment intentions in both manufacturing and services sectors at lowest level for eight years
In the services sector, the percentage balance of firms reporting an increase in export sales stood at zero, its weakest level since 2009 and the orders balance turned negative (more firms reporting that orders have decreased than those reporting an increase) for the first time in eight years. The balance of firms reporting improved domestic sales and orders also weakened significantly in the quarter.
Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:
“The services sector suffered the more substantial loss of momentum in the first quarter with both domestic and international activity slowing sharply in the quarter. The manufacturing sector continues to struggle amid tougher global and domestic trading conditions and rising cost pressures. The marked decline in the export indicators in both sectors suggests that net trade is likely to have been a drag on UK GDP growth in Q1. The deterioration in cash flow is concerning as it can leave firms more vulnerable to external shocks, including disruptions to supply chains.”
- The balance of firms reporting increased domestic sales fell six points to +15, while those reporting improved domestic orders also fell from +16 to +9 – both are at their weakest level since Q4 2016
- The balance of firms reporting improved export sales fell from +20 to +14, and the balance of firms reporting improved export orders dropped from +18 to +10 – both their weakest since 2016
- The percentage of firms attempting to recruit fell from 67% to 62%, the weakest since Q1 2012. Of those, 79% reported recruitment difficulties, close to its record high
- The balance of firms reporting increased domestic sales fell from +18 to +10, the weakest since Q3 2016. Those reporting improved domestic orders fell from +14 to +5, the lowest since Q3 2012
- The balance of firms reporting improved export sales fell from +14 to +0, the weakest since Q2 2009. Those reporting improved export orders dropped from +9 to -2, reaching negative territory for the first time since Q4 2011
- The balance of firms confident that turnover and profitability will improve over the next year fell slightly, from +37 to +26 for turnover (lowest since Q4 2011) and +28 to +19 in profitability (weakest since Q3 2016).
NOTE: These are the national results, to which West & North Yorkshire Chamber does contribute. Our own results will be published separately approximately two weeks after the national findings.