Suffolk Chamber business survey: improvements continue, but long-term plan is needed
The latest figures from Suffolk Chamber of Commerce’s Quarterly Economic Survey (QES) – for the last three months of 2020 - shows that the rebound from the previous quarter has continued, albeit at a slower pace, prompting the business body to redouble its calls for a 12-month Government support package.
22 of the 30 criteria measured improved quarter-on-quarter, including sales, orders and hiring intentions with eight declining, including company cashflow statuses and equipment investment plans.
However, most of the criteria measured by the survey remain both in negative territory and noticeably below the levels from the same quarter in 2019, although the Suffolk figures tend to be more robust than those for the east of England as a whole.
The survey was conducted before the announcement of the trade deal between the UK and the European Union, the impact of which is likely to be reflected in the next sequence of QESs.
Based on the figures for the fourth quarter of 2020, Suffolk Chamber is upping its calls for a year-long Government programme of business support, rather than the more short-term approaches taken throughout last year as the economic effects of the COVID-19 pandemic continue to drag down business activity and sentiment.
The balance of manufacturing firms reporting an increase in domestic sales rose by 25 percentage points to +21% (ie more companies reported an increase, rather than a decrease) compared with Q3, with overseas sales at +5% (an increase of 11 percentage points).
The numbers of firms reporting an increase in current employment rose from +4% to +27%, with those anticipating a future increase in employment rising from +5% to +33%.
Those reporting positive cashflow stood at 0% (down by eight percentage points), with investment in plant, machinery and equipment down three points to +13%, confidence in improving turnover at +3% (up seven percentage points) and improving profits at -3% (up by 26 percentage points).
The balance of service firms reporting an increase in domestic sales fell to -9% (a one percentage point fall compared with Q3), with overseas sales at -21% (up by 49 percentage points).
The numbers of service firms reporting a rise in employment increased marginally from -10% to -9%, with those anticipating a future increase in employment improving from -18% to +10%
Those reporting positive cashflow stood at -11% (down two percentage points), with investment in plant, machinery and equipment up 17 percentage points to +3% with confidence in improving turnover at +17% (up by 30 percentage points%) and improving profits up to +4% (up by 28 percentage points).
Paul Simon, Suffolk Chamber’s head of communications & policy, said: “There is a lot of hope and optimism in these figures.
“As with the data for the previous quarter, they reflect well on the resilience and hard work of the county’s business owners and their employees during a period of great uncertainty due to the second spike in COVID19 infections and the UK/EU trade negotiations.
“However, if business activity and sentiment is to continue to rebuild, and some of the key indicators such as cashflow and investment are to reverse their recent declines, it is vital that the Government now articulates its full programme of support for 2021, including a Budget which reboots how and when firms pay tax so as to boost and not penalise long-term risk-taking and growth.
“A New Deal for Business is required. This will allow businesses to go about delivering their employment and investment plans with confidence.”
Suffolk Chamber is grateful to Suffolk Knowledge, part of Suffolk County Council, for providing the analysis of this QES.