West businesses remain relatively confident about their prospects despite trading conditions becoming harsher during the first three months of this year.
The latest Quarterly Economic Survey (QES) from Business West, which runs the chambers of commerce in Bristol, Bath and Gloucestershire and the Bristol and Swindon Initiatives, shows that most key indicators were down compared to the end of last year. It was based on responses from more than 500 businesses across the region,
Business West managing director Phil Smith, pictured, said: “There’s a compelling story to tell from the first quarter survey results this year particularly with the results coming so soon after the Chancellor’s budget where there was little to encourage small business.
“What our local businesses are telling us is they are confident, despite the Chancellor sticking to austerity measures and ‘Plan A’. They are confident about their prospects for the year (66%) and about sales and orders, both UK (32%-39%) and export (23%-24%)."
However, he said this confidence needed to be tempered with a look at reality – while businesses consistently expect sales and orders to increase, the Business West survey results show this has not happened. Sales and orders, both UK and Export, have largely remained the same over the last few quarters.
“To complete the story, all is not rosy as businesses, like the Chancellor, find themselves stuck between a rock and a hard place – 70% of businesses are operating below capacity and nearly 60% are not exporting at all," said Mr Smith. "For Others are concerned about inflation, with nearly 30% predicting they will have to increase prices in the next 3 months and 25% stating they see current inflation levels as a barrier to growth.
“The overall results provide a glimpse of the potential for recovery and show some confidence within the business community. However, most of the indicators are down on the same time last year and are still below their pre-recession levels (2007). Businesses up and down the country are working hard to drive the economy, create jobs and export, but they cannot accelerate this process alone.”
For Debbie Staveley, founder and director of Clevedon-based PR agency bClear Communications, the biggest barriers to expansion of her business are the lack of suitably skilled and trained workers and the lack of frequent, efficient and affordable public transport into Portishead and Clevedon.
Business West undertakes the survey with the British Chambers of Commerce as part of its national quarterly survey made up of responses from more than 7,000 businesses.
The national survey results were:
- Business confidence has increased further, with all balances much stronger than their average levels in the midst of the recession in 2008 – 2009.(Manufacturing turnover confidence rose 3 points to +44%, and by 2 points in services to +40%. Profitability confidence increased by 3 points in manufacturing to +33%, the highest it’s been since Q4 2007, but was unchanged for services at +22%).
- Investment intentions rose slightly overall in the first quarter. The balance of manufacturing firms looking to increase investment in plant and machinery rose three points to reach +14% – the best level since Q1 2012. In services, this balance increased by 4 points to reach +9% – the best level since Q4 2007.
- Intentions to raise prices are weaker in Q1, particularly for manufacturers where balances dropped 19 points to +17%, which reflects reduced pressures from raw material costs. The balance of service firms expecting to raise prices fell 2 points to +19%.
- Overall, the Q1 results support our view that the economy will record positive but subdued growth in 2013. British businesses are resilient, but many balances are still below pre-recession levels and growth remains too low.
