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East Midlands Chamber News

Chamber Survey Highlights Bumpy Road To Recovery

© Marsevis (Stock Free Images and Dreamstime Stock Photos)Falling domestic and export sales and tightening cashflow saw the performance of the economy in Derbyshire and Nottinghamshire dip in the first three months of 2013, according to the results of the region’s biggest regular independent business survey.

Derbyshire and Nottinghamshire Chamber of Commerce’s (DNCC) latest quarterly economic survey found that business confidence also fell back, with future orders in both the domestic and export markets decreasing.

DNCC uses the survey to track business performance across a range of economic indicators to produce a quarterly “State of the Economy Index”, which dipped by 53 points in the first quarter of the year, from 194 in the previous quarter. The index currently stands at its lowest level since Q4 2011.

QES State of Economy Index Q1 2013

In the latest survey, UK sales fell by a net 12 per cent amongst local businesses, with export sales dropping by a similar proportion in Derbyshire, but showing a marginal improvement in Nottinghamshire.

The number of businesses that increased the size of their workforce fell by a net six per cent, although the number of businesses attempting to recruit increased slightly across the two counties.

And the proportion of firms reporting worsening cashflow went up by a net 15 per cent during Q1, which highlights the importance of facilitating the provision of working capital and increasing the flow of money to support growing businesses.

Looking ahead to Q2, investment intentions for both plant and machinery, and training remain static in Derbyshire, with confidence in future profitability also lower, although confidence about future turnover is slightly higher. In Nottinghamshire, investment intentions dipped significantly, with confidence about future profitability and turnover also reduced.

Commenting on the results of the survey, DNCC President Ian Greenaway said: “Following two straight quarters of improved business performance here in Derbyshire and Nottinghamshire, the fact that the pace of economic growth slowed in the first three months of the year is disappointing.

“It is, however, important to keep things in perspective and remember that overall, we still saw economic growth in 2012 and the performance in the first three months of 2013 may well be a short-term variation.

“That said, these results are a stark reminder that growth is still weak, and Government must quickly implement the positive growth measures announced in the recent Budget regarding skills, infrastructure and housing investment and encouraging job creation through the incentive of reductions in employers’ National Insurance Contributions.

“The D2N2 Local Enterprise Partnership is helping economic growth through its facilitation of a number of grant and loan funding schemes aimed at supporting business growth, a remit which was expanded in the Budget.”

Survey fieldwork carried out online between 18 February and 13 March. There were 314 respondents to the Quarterly Economic Survey, 173 from Derbyshire and 141 from Nottinghamshire. There were 184 respondents from service sector businesses and 129 from manufacturers.

The table below is a summary of the net balances of a number of economic performance indicators in Q1 2013 and the changes in balances from the previous quarter. Balances show the difference between the percentages of businesses reporting improving or increasing positions and those reporting worsening or decreasing ones.

QES Data Table 1

The following table is a summary of the net balances of business expectations for the next quarter, compared with how they’ve changed since December 2012.

QES Data Table 2

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