Latest Chamber survey shows that Mid Yorkshire firms are buoyant at the start of 2014.
Our latest Quarterly Economic Survey shows improving confidence among local businesses as we enter a new year. Firms across the manufacturing and service sectors reported increasing expectations for both turnover and profitability in 2014 as export orders improved and domestic sales and orders remained steady.
Indicators across almost all measures in the Quarter 4 Chamber survey were up, with employment expectations, business confidence, and sales and orders particularly buoyant. The positivity of these figures was mitigated only by a deterioration of business investment in training and capital and by a weakening of cashflow. These issues may in part be a legacy of the recent national economic difficulties which have impacted on business access to finance and slowed credit lines. However, we will hope to see resurgence in investment decisions as businesses turn improved confidence into substantive action and growth.
Businesses reported ongoing concerns over taxation, highlighting business rates as a significant pressure. Exchange rates also registered as a concern, particularly among manufacturing businesses.
Chamber Head of Policy, Steven Leigh, commented on the Quarter 4 survey:
“As we begin a new year it is encouraging to see positivity from Mid Yorkshire companies. It has been a difficult few years for the business community and many firms across all industries and of all sizes have had to be agile and determined in order to survive. However for many companies this determination has paid off. Difficulties in the home market have encouraged companies to find new customers at home and abroad. Rising costs have led many businesses to re-negotiate supply chains, and some companies have used the period to update their core products and services by investing in research and development. And so it is with a degree of optimism that we approach 2014, in the hope that these strategic decisions; the efficiencies found, the new products and services developed and the difficulties overcome, will place Mid Yorkshire firms in an ideal position to exploit new opportunities in the coming year.
But much of this will rely on Government. Whilst the substance of many recent policy announcements – national insurance tax breaks, infrastructure investment, the British Business Bank – has been positive, there has been too much equivocation on issues of real significance. This has particularly been the case with politically sensitive areas, such as membership of the European Union, where divisions both between Coalition partners and within parties have been evident. On such a serious issue, which has a significant impact on investment decisions for UK companies, as well as trading decisions for overseas partners, more certainty is vital. Political posturing on this issue, and on the future of our airports and railways, creates a climate of uncertainty. It is our sincere hope that during 2014, and in the lead-up to the 2015 General Election, there will not be further exaggerated political posturing on these issues.
Finally, we also hope for a longer term solution to the issue of Business Rates. As we have repeatedly stated, this tax is a counter-intuitive levy which is having serious continuing effects on small businesses and on our high streets. Government should give consideration to a full review of the ongoing fairness and relevance of the this tax in view of new factors, such as the increase in internet trading, if we are to prevent our town centres from becoming even more adversely affected. We will be emphasising this message to policymakers at all levels in the new year.”
Christopher Redfern, Dealing Manager at Moneycorp, providers of the Chamber Foreign Exchange Service, commented on manufacturer’s exchange rate concerns:
“Sterling and the UK have been the top performers amongst the world’s major currencies and economies in Q4. The pound has reached a two year high against the dollar and an 11 month high against the euro on the accelerating performance of the UK economy. This has come at a time when Europe is only just coming out of recession and US politicians play dangerous games with the US economy while their recovery falters.
Overall, importers have benefited from the recent strength in the pound but should be wary as the Bank of England and UK government are thought to favour a weaker currency and the implied benefit this has exports, in order to strengthen our export performance - which is still perceived to be a major weakness in the UK economy. UK manufacturers are rightly concerned about currency implications for the previous quarter and for the start of 2014 and should seek assistance to manage their exposure to foreign exchange.”
Find out how firms across the Yorkshire and Humber region responded in this QES infographic.
Find out more about how Moneycorp can help you to manage your company's foreign exchange requirements.