Suffolk manufacturing bucks the national trend

Service sector under pressure but local economy proving to be resilient says the voice of business

A new recession is not inevitable but the continuing stagnation of the economy needs to be addressed quickly a key economic survey of business in Suffolk has found.

“2011 proved to be a very difficult year,” said President of Suffolk Chamber, Dr Peter Funnell, following the publication of the Chamber’s fourth quarterly economic survey of the year. “Business has throughout the year displayed great resilience but we now need stronger measures from the Government to stimulate economic growth.”

The survey was conducted in early December and the results were analysed by the research team at Suffolk County Council.

“The last twelve months have been very challenging for the entire business community and the final quarter seems to have been as tough as any, fuelled undoubtedly by the worsening eurozone crisis,” Dr Funnell added. 

Manufacturing performance in the county seemed to buck the national figures in the fourth quarter.  This in contrast to Quarter 3 of 2011 when Suffolk manufacturers seemed to be more challenged than UK manufacturing generally.

The domestic market order book has shown a marked (48%) improvement over Quarter 3. Manufacturers have done well in export markets too with deliveries stable and order books improving. It is believed a weak pound may be helping exporters in global markets but the recent surge in the pound against the euro ought to be making life tougher for exporters.

“Manufacturers are telling us that they are more optimistic about future prospects, again bucking national trends,” said Dr Funnell. “Employment has remained stable throughout the last quarter and manufacturers are optimistic about employment opportunities increasing early in 2012.”

Investment in plant and machinery and in training all improved on the figures for Q3. All of this has had a positive knock-on effect with manufacturers’ confidence in turnover and profitability improving; this is at odds with much of 2011 and also with the emerging national picture.

Results on the service sector present a different scenario with the downward trend developed in Q3 being maintained in the last quarter of 2011. Both domestic market deliveries and orders fell markedly on the previous three months.  Both domestic and export figures were worse than the national figures which have shown a slight improvement.

“Despite the challenging time for the service sector, businesses took a positive view of employment prospects with a 2% increase in firms taking on employees in the last three months,” Dr Funnell said. “The sector’s firms were less positive about investment in plant, machinery and training budgets, all of which showed a decline,” he added.

“All of this seems to describe a shifting and often contradictory picture from quarter to quarter,” concluded the Chief Executive of Suffolk Chamber John Dugmore. “The variances though are all on the margins, and the overall picture for 2011 showed a resilient business sector struggling within an environment where robust economic growth was nigh on impossible to achieve.”  

“That is why Suffolk Chamber and Chambers nationally have continually pressed the Government to take further action on access to finance, infrastructure and employers’ costs to stimulate enterprise and counteract stagnation and avoid any prospect of a new recession.”