01 Jul 2019
This quarter St Helens businesses report fairly steady market conditions with no major shocks.
The quarterly economic survey for the second quarter of 2019 shows manufacturers’ domestic sales remaining the same, while their advance orders have slightly increased. Services firms’ domestic sales and advance orders have both dipped against the levels at the end of Q1, but remain in positive territory.
There are some warnings on the horizon with both manufacturers and services companies once again reducing their investment into plant and equipment, and training, both areas of investment which have not yet recovered to where they were in mid-2018.
Over the next three months both sectors intend to increase their workforce, which is a positive sign. However, Q2 has not been good for employment growth, with 85% of manufacturers saying that their workforce had remained constant, and a -4% decline in employment for services firms. Firms did attempt to recruit, however they still report experiencing significant recruitment difficulties.
Cash flow has moved back into positive territory for manufacturing firms this quarter, but is still a major worry for services firms.
Compared to last quarter the confidence level over turnover and profitability in the future has rebounded. +35% of manufacturing firms believe that their turnover and their profitability will improve over the next few months. +20% of services believe their turnover will increase, however they are not so confident about profitability at only +6%.
Firms report quite a fall in their level of intention to raise prices this quarter, signalling less inflationary pressure but also less headroom for firms to maintain profitability and investment levels.
Tracy Mawson, Deputy Chief Executive at St Helens Chamber, commented: “The continued lack of investment by firms is a concern, but something which is only likely to rectify once there is a clearer indication of what the future might hold for British business.
“Many businesses will continue to put off major decisions on investment, hoping for a breakthrough in the Westminster impasse before the Brexit deadline on October 31st. The government must take tangible steps to inject confidence into the UK economy, and quickly.
“To boost and incentivise investment, our businesses need to see a bold growth agenda here at home. Businesses want to see concrete and deliverable plans.
“The stall in recruitment is also a concern for the growth of the local economy. Of those businesses who did attempt to recruit last quarter, 71% of manufacturers and 60% of service businesses reported difficulties in finding the right staff. These are significantly high numbers.
“83% of manufacturing firms who attempted to recruit had difficulties finding skilled manual and technical staff, with 50% of services firms also struggling to fill that category of recruitment, and 28% reporting difficult filling professional/managerial vacancies.”
A full summary of results on the current quarter is available to view here.