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East Midlands Chamber News

Regional manufacturers primed to invest

The number of businesses considering investment in new machinery has almost doubled in the first three months of 2018 compared with the latter end of 2017, latest research has shown.

In the first quarter of this year, the number of firms reporting plans to increase investment in plant jumped to net 42%, according to the results of the first East Midlands Chamber* Quarterly Economic Survey of the year. In the final three months of 2017 only net 23% of firms reported plans to increase investment.

Chris Hobson, Director of Policy at the Chamber, said: “Business hates uncertainty and the country has gone through a long period of upheaval with two general elections and the EU referendum in the past three years.

“The Brexit vote was followed by a lot of doubt about the UK’s future relationship with the EU, which remains today the UK’s largest single market for export.

“But business is also extremely robust and has an uncanny knack of sifting through the negativity to seize opportunities, and there can be no doubt that those opportunities exist.

“Those businesses already exporting, for example, were very quick to ramp up production when the value of sterling fell immediately after the Brexit vote, making UK-branded products cheaper on world markets.

“With a period of relative stability since the General Election last year and with the various assurances that have been emerging from the Brexit negotiations, businesses have shown they are beginning to believe in a future beyond the EU and to invest for that future.

“A week after the survey closed, the Government and the EU announced agreement over a two-year transition period following Brexit day, which effectively now gives firms three years to secure a return on investment in plant, premises and people.”

The results of the East Midlands Chamber Quarterly Economic Surveys feed into national data collated by the British Chambers of Commerce which is then used to advise Government and shape policy.

Professor Zoe Radnor, Dean at the University of Leicester School of Business, which is sponsoring the East Midlands Chamber Quarterly Economic Surveys this year, said: “Our work with the Chamber aims to create a clearer picture of the local economy. Having greater certainty of the future allows confidence to grow and it is encouraging to see that regional businesses are increasingly optimistic about the future and are considering investing in their facilities.”

“The Chamber continues to grow its influence as an authoritative source of up-to-date data and insight on the local economy.”

The University of Leicester School of Business is a vibrant, international and interdisciplinary community of over 150 academics.

With over 90 years of experience delivering business education, it is internationally renowned for its courses in accounting and finance, management, marketing and economics, with a global alumni network of over 30,000.

It is ranked 14th in the UK for research power, reflecting the pioneering work conducted in partnership with leaders, managers and organisations to promote and strengthen responsible business practice.

For further information about the University of Leicester School of Business visit www2.le.ac.uk/departments/business.

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*East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire)

Notes to Editors:
1. The survey was open from February 19 to March 12 2018 inclusive and was completed by 394 regional firms.
2. The net figures in the second paragraph are calculated by deducting the number of firms planning to reduce investment in plant from those saying they were planning to increase investment. In Q4 2017 34% of firms said they planned to increase invest in plant and 11% said they revised their investment plans downwards, resulting in a net figure of 23%. In Q1 2018, the figures were 42% (rounded down) and 1% (rounded up) respectively.
3. The survey produces a State of the Economy Index which hit its highest level (392 points) since Q2 2014 (411 points), indicating increased business confidence. The index is calculated by totalling the net outcomes of questions that repeat in each quarterly survey.
4. An infographic highlighting key points of the survey results can be viewed at https://infogram.com/qes-brief-1h174930q1xl4zj