Chambers of Commerce: Economic recovery continues but still no room for complacency

The Lancashire Quarterly Economic Survey (QES) released today (Wednesday) provides further evidence that the Lancashire economy is continuing along the path to recovery, albeit slowly.

The new survey, compiled by the county’s three Chambers of Commerce in association with Moore and Smalley Chartered Accountants and Business Advisors, shows that despite some key balances weakening in the final Quarter on 2013, overall prospects for growth look stronger than in the last two years.

The manufacturing sector has again outperformed the service sector in Q4, most notably with further growth in export sales and orders.  However, looking at 2013 as whole, the service sector has had its strongest year for three years.

There was good news on the employment front as 30% of businesses said that they expect their workforce levels to increase in the next three months.  The figures also reveal a 16% increase in the number of firms recruiting for full-time positions and a 13% increase in firms trying to fill permanent vacancies.

On a cautionary note, both sectors saw an increase in the number of firms intending to increase prices over the next three months and inflation remains a major area of concern for businesses.

Commenting on the results, Babs Murphy, Chief Executive of the North & Western Lancashire Chamber, said:

“The strong export and investment balances confirm that business is set to play a key role in rebalancing the economy.  However while the overall message from this survey is positive, there are risks that should prevent complacency creeping in.  The eurozone’s basic problems have not yet been resolved, which could adversely impact our exporters, and inflation remains a major concern.

“This means it is vital to prevent setbacks as the economic recovery gathers pace. The MPC must continue with its forward guidance on interest rates, and remain steadfast in its plans to keep inflation low and meet the 2% target. On its part, the government has to work to increase the flow of lending to growing businesses through a fully-funded Business Bank, to ease the logjam of those firms striving to expand.”

Stephen Gregson, Corporate Finance Director at Moore and Smalley, added:

“We must hope that the tangible recovery we are seeing continues to have sustained momentum in 2014 and is driven by real increases in business investment and activity, not just by house price increases.

“However, the results of the latest Quarterly Economic Survey show that Lancashire’s businesses are in a better position than they were 12-months ago and are planning to make investment and recruitment decisions. The glass definitely remains half full.”