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East Midlands Chamber News

Some businesses made hay while the sun shone

Some businesses made hay while the sun shone during the summer but many lack confidence looking ahead, according to latest research by the Chamber.

Sales for the three months leading up to the third Quarterly Economic Survey of 2018 and orders for the next three months were buoyant, showing a marked improvement compared with Q2 results.

Responses to questions relating to longer-term confidence, investment and the prospect of price rises, however, suggest an economy that is considerably less certain about medium- and long-term prospects.

The biggest concerns, the survey found, were about exchange rates, interest rates and inflation, all of which fall outside a business’ direct control and could suffer hefty fluctuations because of Brexit.

Potentially worrying was a small fall in the number of firms reporting concerns about competition, which is held to be an important indicator of a healthy economy.

Chris Hobson, Director of Policy at the Chamber, said: “It isn’t hard to see what’s behind these concerns, with the Brexit deadline getting nearer and progress towards a deal seeming as far away as ever, business jitters are understandably increasing.

“As with the wider public, views in the business community about Brexit are diverse and it’s impossible to generalise as to what people believe will be a desirable outcome. However, of near universal agreement is that businesses need their politicians to demonstrate a willingness and ability to work together to demonstrate what the likely direction of travel will be.

“For many, particularly manufacturers, money is already being spent on shoring up positions and mitigating – even if only partially – the potential impact of an unruly exit from the EU.

“Regardless of perspective, a ‘no deal’ Brexit will mean significant changes to the business models of many Chamber members and that isn’t something that can be delivered overnight. If this is where we are to end up then the sooner we know it the better.

“In uncertain times, the East Midlands economy continues to succeed and demonstrates a robustness not seen elsewhere in the UK.

“Many of our members have purposefully set themselves up to be able to respond to changes in the worlds in which they operate but this ‘fleet of foot’ robustness should not be relied upon to get us through the next six months. The greater the lead-time we get for whatever changes are to take place the better.”

After each survey, the net figures of various indicators are combined to produce a State of the Economy indicator.

While the figure will hide variations in individual responses, it gives an indication of the general direction-of-travel for the economy and the change quarter-on-quarter.

Overall, there was a small rise in the Q3 SEI from Q2, driven in the main by strong performances in UK and overseas sales and orders activity.

The Chamber’s Quarterly Economic Surveys are sponsored this year by the University of Leicester School of Business which has over 90 years of experience delivering business education and 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.

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Notes to Editors:

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

2. The Q3 QES can be read at https://bit.ly/2QCuVBd.

3. An infographic showing highlights of the survey can be viewed at https://bit.ly/2pJ0WMw.

4. Graph shows the Chamber’s State of the Economy Index over the past five years