“Manufacturers doing worse, service companies better” as overall activity continues to flatline

Results from Suffolk Chamber of Commerce’s Quarterly Economic Survey (QES) for the period April to June 2026 show that trading conditions in the county remain at their harshest for some time. The figures are broadly in accord with the national data published by the British Chambers of Commerce with the impact of the Iran War clearly shown through increased worries in price hikes and supply chain challenges.

Quarter-on-quarter improvements in some service firms’ trading experiences were offset by similar declines in indices for manufacturers service firms. These movements were a reversal of the previous three-monthly trend, suggesting that the Suffolk economy is stuck in a holding pattern of subdued activity and sentiment.

Overall, most of the measures recorded by the QES remained in negative territory. A negative balance indicates that a greater proportion of businesses reported worsening conditions than those reporting an improvement.

Most manufacturing sector balances declined in the second quarter of 2026, including domestic sales (down 24 percentage points to -20%), domestic orders (down 21 percentage points to -29%), export sales (down 44 percentage points to -50%) and domestic orders (down 44 percentage points to -56%).

Manufacturers’ investment in plant and machinery fell by 14 percentage points to stand at -2%9, whilst confidence in improving profitability and turnover fell by 36 and 32 percentage points respectively to -39% and -14%.

There were upticks for investment in training (up 15 percentage points) and cash flow (up 12 percentage points), with the former at +4%, although the latter remained in negative territory at -18%.

For service companies, there were quarter-on-quarter boosts for domestic orders (up six percentage points) , cash flow (up nine percentage points, both investment measures (up 12 percentage points for plant and machinery and 13 percentage points for training) and confidence in improving profitability (up 13 percentage points) and turnover (up nine percentage points).

However with the exception of turnover, all the other measures remain in negative territory.

Inflation worries have increased since the last survey with 43% naming it as a concern. Unsurprisingly 64% of manufacturers and 49% of service companies reported pressure to raise their own prices. Evidence from the commentaries added by some companies attributed that some, but not all, of this has been due to the Iran War and its impact on global supply chains.

That said, the most significant business concern remains taxation, mentioned by nearly 70% of respondents.

The survey also captured personal accounts of the impact of these ongoing challenges for Suffolk businesses:

Van rental company: “We are taking risks this year to grow. But these are mainly linked to Europe, as there is more confidence. We have considered moving the operation to Europe”

Software development company: “A 200% increase in a key supplier's prices a year ago is still making life very difficult for us, severely limiting plans for new investment in the business”

Consultant: “Due to the conflict in the Middle East and the requirement to travel on business the availability of fuel is a concern”

Caterer: “Food inflation and wages have outpriced what we can viably increase prices by”

Machinery manufacturer: “The effect on future fertiliser availability due to the war in Iran could be incredibly significant for the agriculture industry”

Paul Simon, Suffolk Chamber’s head of public affairs, said: “Suffolk is full of innovative and hard-working business owners and managers. There is much that is positive happening in the county, but we should not ignore the entrenched challenges that do exist.

“Whilst international events are largely outside the influence of British state institutions, there is more that Government and councils can do to boost business confidence.

“These include rolling back the corporate tax increases in the 2024 Budget and taking steps to increase the percentage of public sector contracts in Suffolk being awarded to Suffolk SMEs, which would better help to sustain local economic growth.”

View Suffolk Chamber of Commerce's Quarterly Economic Survey Break Down