Survey shows mixed reaction to Brexit
The impact of the UK’s vote to leave the European Union has had a mixed impact on regional business with manufacturing firms showing a more positive outlook than services according to the Sheffield City Region Quarterly Economic Survey.
The results – based on nearly 400 responses from businesses across the region – give a snapshot of how the regional economy performed during the three months post EU Referendum. They will be used to better inform local, regional and national government and policy makers on issues of concern and to help shape support structures available to the local business community.
Key highlights from the survey include:
Both the service and manufacturing sectors expect to see increased orders, turnover, prices and profitability, although the balance of these is generally lower than last quarter with the exception of prices, which are expected to rise. This possibly reflects a potential rise in costs associated with the devaluation of the pound.
Over 50% of respondents indicated that the referendum results had not influenced their investment decisions, perhaps indicating that this had already been factored into decisions. However a significant minority indicated it had some influence.
The highest priority issues for the Government and Bank of England to address were the rules for trading with EU countries and the future value of the pound. The least important issues were the current and future immigration status of EU employees.”
There was an even split of businesses who believe Article 50 should be either triggered now, in six months or in 24 months time.
The majority of businesses said the EU referendum has had no impact on their recruitment decisions. Nearly 60% of respondents indicated a growth in business as the driver for increased workforce.
Whilst for both sectors, apprenticeships are the preferred route for recruitment over graduate internships and short term work placements, businesses in the City Region, are in the main, ready for the apprenticeship levy, although a significant proportion are not.
Over Q3, the positive balance of sales has declined in international trade and export for both manufacturing and service businesses, however manufacturing still shows a positive balance.
Looking forward, manufacturing exporters have seen, on balance, a rise in orders, perhaps reflecting the fall in the value of the pound and hence increased price competitiveness in export markets.
Following an analysis of the results, Dan Fell, CEO of Doncaster Chamber said: “As the UK negotiates its exit from the EU, the QES gives a good insight into how regional businesses are faring. The results reaffirm the need to boost business investment, stabilise the pound, raise productivity, and clear red tape. The Government’s mission must be to reduce uncertainty, build business confidence and prioritise economics over politics.”
Sir Nigel Knowles, Chairman of Sheffield City Region LEP, said: “The Quarterly Economic Survey plays an important part in shaping our policy and support for local businesses. I believe that hard data, contemporary commentary, case studies and testimonials should influence strategy and inform the Sheffield City Region’s approach to local, regional and national decision makers and foreign direct investors.
“Shaping policy, ensuring that businesses can compete domestically, globally and securing prosperity and a good return for the local community are core to our mandate. If we know the challenges, issues and opportunities, we can work as partners to deliver and be accountable for doing so.”
The results were presented today (7 October), at the Sheffield City Region QES Breakfast which served as a backdrop to a keynote speech by Paul Swinney, Principle Economist at Centre for Cities and a lively panel discussion, facilitated by Greg Wright, Deputy Business Editor for the Yorkshire Post, with high profile business leaders on what firms want from Brexit.
The Sheffield City Region’s businesses will be surveyed again in November which will continue to reveal the impact of Brexit on the business economy. The Q4 survey opens on 7 November and runs through to 28 November 2016. Everyone who responds will be entered in a prize draw to win free Flybe flights to Paris, courtesy of Doncaster Sheffield Airport.
The survey – run by the Sheffield City Region Local Enterprise Partnership (LEP), four Chambers of Commerce and Sheffield University Management School, and sponsored by RBS South Yorkshire & North Derbyshire – is part of a national survey coordinated by the British Chambers of Commerce to act as an economic indicator for the Bank of England and to advise Whitehall.
Visit www.screconomy.org.uk for further information.