Economic Survey, Q4 findings

Results for the latest Quarterly Economic Survey for West & North Yorkshire Chamber of Commerce have been released.

We report another strong service sector performance across most of our region with long-term trends pointing upwards across all measures.  However, the global downturn is beginning to affect the service sector, especially in Leeds and York. Manufacturers remain relatively upbeat but are not immune from the same global headwinds and indeed report slightly more positive results this quarter.

Here is a summary of the findings.  The full report can be downloaded at the bottom of this page.

Domestic sales and orders
a) Leeds and York’ service sectors both reported a robust end to 2015.
b) The sales balance figure is up 10 points in both locations.
c) Bradford reported a slowdown in the pace of growth: the net balance of 27% is still higher than at any point before Q1 2015.
d) Manufacturers reported growth in sales and orders with measures up 5% and 2% following two consecutive quarters of slowing growth.

Export sales and orders
a) Service sector domestic sales growth is in stark contrast to exports, which slowed dramatically in most of our region; Bradford was the exception, where it rose 3 points to 19%.
b) Manufacturing reported modest growth in sales, up 5 points to 8%.
c) Order books, though, remain in decline as the net balance continues its third consecutive quarter in negative territory at -3%.

a) Companies continue to report headcount increases across the region; the pace of growth is increasing in the service sector.
b) In contrast, manufacturing headcounts fell for the second consecutive quarter.  The long-term trend is still positive, however, with more companies reporting increases than decreases.
c) Recruitment difficulties continue across all sectors: more than half of survey respondents report challenges to find suitable candidates.

a) Capital investment in services is subdued in both Bradford and York but grew to a three- year high in Leeds.
b) Investment in training grew across the region’s service sector, up to its highest ever level in all three locations, symptomatic perhaps of recruitment challenges.
c) In contrast, the pace of manufacturing investment slowed but net balances remain positive so growth is still happening.

Business confidence
a) Service sector confidence remains strong, especially in Leeds, where expectations of increased turnover and profits remain close to Q2’s record levels. In Bradford, companies reported increases for both turnover and profits expectations – are we seeing the ‘Westfield/Broadway effect’ in action?
b) Manufacturers reported lower confidence, reflective of the global conditions in which many operate.
c) Expectations for increasing turnover and profits both fell slightly on the previous quarter and are 18 and 28 points respectively below their Q1 peaks.

Download the full report (24 pages) here.