Regional business ended the year strongly but uncertainty is holding back decision-making; these are the main findings from the Chamber’s last economic survey of 2018. Carried out in partnership with Leeds City Region Enterprise Partnership, the survey highlighted strong employment across the region but indicated a slowing in investment intentions.
Chamber Chair Gerald Jennings said: “The results suggest that major decision-making has been paused due to Brexit negotiations. Underlying factors such as sales and employment remain strong, but many firms are holding back on big investment decisions. Rising input costs also seem to be having an effect too, in part down to the double-edged sword of currency volatility; we expect a greater number of companies will seek to pass on these additional costs next quarter.”
Roger Marsh OBE, Chair of Leeds City Region LEP, added: “Businesses are taking a pragmatic approach to planning for the potential impact of Brexit with many organisations starting to discuss tactics at a strategic level. The impact that the lack of clarity over leaving the European Union has had on businesses continues to be an issue. Going forward we will continue to make the case to government to ensure the concerns of local businesses are being heard and that there are plans in place for continued economic growth post-Brexit.
“The robustness of our services sector has meant the region has outperformed the national picture, with businesses ending the year on a three year domestic sales high. In our region the services sector represents 80% of businesses, so it is especially encouraging that domestic sales in the sector are reporting an upward trend.”
Looking ahead, the Chamber and the LEP remain confident that businesses in the region will continue to deliver economic growth and prosperity in spite of a potentially turbulent economic environment.
The survey was completed by companies collectively employing more than one million people. It is the largest and longest running regional business survey, providing an accurate barometer of business sentiment since 1989. The report can be found at www.wnychamber.co.uk/policy
Domestic sales– We report divergence between the manufacturing and services sector in the last quarter of 2018. Following a period of domestic growth since Q2 17, this quarter manufacturers reported a slowing in the pace of growth. The service sector continues to report increasing domestic sales, which have trended upwards since the middle of 2016
Export sales– Manufacturing export sales also slowed in the last quarter of 2018 across our region following two quarters of strong growth. The service sector reported no chance on the previous quarter in the last three months of 2018.
Employment – Employment remains strong across the region with 60% of manufacturers and 48% of service sector companies attempting to recruit in Q4. Skills shortages remain a challenge and the time taken to fill vacancies has lengthened
Investment – Capital investment increased in the last quarter but remains low by historical standards.
Business confidence – Service sector confidence remains largely unchanged in the last quarter with the number of companies expecting to see increased profits down 2 points to +45%, however the this has been trending downwards since the beginning of 2018. Manufacturing confidence also slowed in the last three months for the second consecutive quarter.
- Leeds City Region Enterprise Partnership works with West Yorkshire Combined Authority to help businesses in our region grow and become more productive.
- The Combined Authority works in partnership with local councils and businesses to ensure that everyone in our region benefits from a strong, successful economy and a modern, accessible transport network. By championing the region’s interests nationally and internationally, we secure the investment to deliver better transport and housing, help businesses to grow and create jobs.
- We want our region to be recognised globally as a strong, successful economy where everyone can build great businesses, careers and lives.
- For more information visit westyorks-ca.gov.uk.