20 Jul 2016
The latest findings of the St Helens Economic Survey show the local economy lost some momentum in the second quarter of 2016, with the majority of key indicators stagnant. Worryingly both manufacturers and service sector businesses reported a fall in job creation.
Workforce levels fell sharply for manufacturers this quarter, whilst the service sector has seen a slower decline over the last two quarters. Heightened uncertainty around the economic outlook and the introduction of the National Living Wage in April are both thought to have impacted on this.
The fieldwork for the St Helens Quarterly Economic Survey took place before the EU referendum result on the 24th June, so it is difficult to gauge the impact this has had on the findings, however anecdotally we know the uncertainty may delay some firms making financial decisions around investment and recruitment.
The subsequent effect on the pound will mean that although our exports will be cheaper, manufacturers will be expecting much higher raw material costs as the things they import become more expensive to buy.
Tracy Mawson, Director of Business Services at St Helens Chamber, commented: “In the wake of the decision to leave the European Union, the immediate priorities for UK business are market stability and political clarity.
“Some business people will be pleased with the result, and others resigned to it – yet all companies will expect decisive and co-ordinated action from the Government and the Bank of England.
“Business will also want to see a detailed plan to support the economy during the coming transition period – as confidence, investment, hiring and growth would all be deeply affected by a prolonged period of uncertainty.
“So far, the priority for the Government and the Governor of the Bank of England has rightly been the question of stability, as markets and firms digest the electorate’s decision. Firms now want a clear timetable, and simultaneous action to support the wider economy.
“Action and momentum over the coming months are vital to stoking the embers of business confidence. Right now, it’s a wait and see game for many business – but the health of the economy must be the number one priority – not the Westminster political post-mortem.
“Members can be assured that St Helens Chamber will be working very closely with the British Chambers of Commerce to articulate your concerns at the highest level of Government.”
St Helens Chamber’s economic survey is a finger on the pulse of St Helens economy. The Chamber makes full use of the findings to influence local and national policy makers to help them create a better environment for businesses to thrive.
The full QES report for Q2 2016 can be viewed here.