Wednesday, January 8, 2014

News: Businesses optimistic but more finance needed

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The British Chambers of Commerce's Quarterly Economic Survey (QES) released this week provides further evidence that the UK economy is growing at a solid pace, and could even strengthen in the short term.

The Q4 survey, made up of responses from nearly 8,000 businesses, shows improvements in most areas for both the manufacturing and service sectors, and that all key balances are stronger than their long-term historical averages.

Five key manufacturing balances are at all-time highs, allaying fears in Q3 that the growth spurt in manufacturing was temporary. The survey results were particularly positive around export sales and orders which saw an improvement. However, while results were positive, overall they were not as impressive in other key areas compared with what had been a successful third quarter of 2013.

The sector saw a fall in UK sales and orders, as well as investment in machinery and training, and while turnover and profitability remain at good levels, they too had reduced. Employment expectations and cash flow had remained static.

Andrew Denniff, chief executive at Barnsley & Rotherham Chamber of Commerce, said: "It is good and solid news to start the New Year with a very positive survey. Confidence is high and our members are resolute in their determination to take the recovery from being good to being truly great. Firms across the board believe they can create jobs, invest, and export.

"It is especially pleasing that the spurt in the manufacturing has proven not to be a fluke, which demonstrates the dynamism of our small, high value, manufacturing sector. But businesses have major ambitions, and to be able to meet them, more support must be provided.

"Cashflow continues to be an ongoing concern, and may hold businesses back from expanding to meet the growing levels of demand. We must give companies the opportunity to get the finance they need to go out and trade the world if we are to succeed in rebalancing the economy."

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Richard Wright, executive director of Sheffield Chamber of Commerce, added: "These results mirror what we are hearing from businesses in a variety of sector across the Sheffield City Region. Confidence in the economy is improving and the green shoots of recovery are certainly visible.

"However, we must not take our foot off the pedal as levels continue to be low. More can still be done by the local authorities, LEP, Government and the Chambers of Commerce to support the environment in which businesses trade to ensure growth continues to progress, especially around exports and improving cash flow.

"Also, businesses must play their part by developing long-term plans and investing in the future, working collaboratively and with the public sector to devise projects which have a global impact."

Barnsley & Rotherham Chamber of Commerce website

Images: BCC

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