MC Vanguard urges local businesses to build on wider trade links during post-Brexit uncertainty

The results of the British Chambers of Commerce (BCC) Quarterly Economic Survey compiled from more than 7,000 responses from firms in Q3 2016 reveals a mixed picture. Whilst there has been an improved short-term performance in the manufacturing sector, there has been a slowdown in growth in the services sector.

The results show a fluctuation in the Liverpool and Sefton area after a period of uncertainty and political upheaval brought about by Brexit,  with overall growth trending downwards against previous periods the most notable of which being the projections of business turnover and profitability and overall business confidence, all of  which were markedly reduced in the quarter.

Brian McCann
Pictured: Brian McCann

Commenting on the results, Brian McCann, Chair of MC Vanguard, sponsors of the local Quarterly Economic Survey, said: “Inevitably there is evidence of a post Brexit slow down. What really matters now however, is how businesses and support agencies react so that we can take advantage of the opportunities that Brexit brings.  For example, wider trade links are afforded to us by a lower exchange rate, whilst managing the risks brought about by higher inflation and a probable slow down in consumer spending.

The recent  trade mission to China (led jointly by Liverpool & Wirral councils) is a great example of taking advantage of wider trade opportunities. Many Liverpool businesses including MC Vanguard are already investing in additional specialist resource to focus on opportunities in China.

”Jenny Stewart, CEO of the Liverpool & Sefton Chambers of Commerce further commented: “These results are unsurprisingly reflective of the period of economic and political upheaval our country has been through. The government’s actions in the aftermath of the vote to leave the EU have been based largely on rhetoric at the expense of clear, strategically defined plans upon which business can prepare. The subsequent uncertainty has been felt by business and is imprinted in these survey results at both a local and national level.”

Other key points arising from the survey were:

  • An increasingly slow pace of growth, despite short term performance improvement, being reported in UK and international sales in both service and manufacturing sector companies including:
  • A flat-lining of service sector UK sales
  • A negative balance of firms reporting domestic orders on the books for the first time since 2011, -6% of manufacturers and -8% in services
  • Reduction in international sales growth in manufacturing respondents to +8 from previous quarter of +15A continuing trend of reduced overseas orders in manufacturing from +29 to +15.
  • A negative balance of service-sector firms reported increases in workforce during the past three months with the same respondents reporting a decreasing demand for new recruits over the coming quarter.
  • Both services and manufacturing companies reported huge difficulties recruiting appropriately trained staff in the quarter; 89% of manufacturing respondents and 85% service companies reported this problem.
  • A negative balance of firms reported increasingly problematic cash flow positions across both sectors; -7% manufacturing and -2% services.

Investment in training and equipment continued to reduce as did business confidence in achieving profitability in the coming 12 months, most likely stimulated by the uncertainty of the EU referendum vote.

The local survey results mirrored the national trend, suggesting that short term uncertainty following the vote to leave the European Union has led businesses to lower their expectations for hiring, turnover, and investment in plant, machinery, and training.

To have your say in the next Quarterly Economic Survey please complete the survey in the attached link before 28 November 2016

For further advice and guidance as to how your business may be affected by the economic downturn please contact our team  who will be happy to discuss your business needs.

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