The Quarterly Economic Survey portrays a regular picture of local and sub-regional economic trends and business performance/activities, including order books, investment plans and recruitment.
This long-running survey also monitors business confidence and supports the economic forecasting of key organisations like the Bank of England.
Service sector sales growth remains strong across all sub-sectors. ICT, hospitality and retail all outperforming the regional average. Elsewhere the pace of growth in manufacturing sales slowed with supply side challenges largely to be blame as order fulfilments are delayed. Construction sector sales continues to remain strong across our region although supply challenges also exist.
International sales remain subdued across the region with around half of manufacturers still facing challenges exporting in to the EU. Issues around the cost and availability of logistics and transportation, UK border delays and the impact of new trade procedures are the most commonly cited barriers.
Employment is strong across the region, in line with national data showing job vacancies at their highest recorded level. The number of manufacturers looking to recruit in the next quarter is at its highest level in this survey’s 32 year history.
Net balance figures have now returned back to pre-pandemic levels.
The standout factor this quarter is rising input costs and inflationary pressures. Many manufacturing and construction firms have attempted to pass these on but this is not always possible. Furthermore delays in supply chains are holding up order fulfilment and in turn causing cash flow challenges.
BUSINESS COSTS AND CONCERNS
Expectations of increasing turnover remain strong across all sectors, however an increasing number of manufacturing firms expect profitability to slow over the next 12 months.