The North East’s largest business organisation has issued a “wake-up call” to the Government after a survey showed downward trends across a number of key areas as Brexit uncertainty starts to bite.
The North East England Chamber of Commerce’s Quarterly Economic Survey shows a marked decline in business confidence, concern about competition and increased materials costs.
The results come at a time of signs of growing problems in the economy, with both the services sector and the construction industry showing a contraction in figures published this week.
A number of business groups have criticised the Government for the uncertainty caused the continuing Brexit negotiations in Whitehall, with the British Chambers of Commerce saying that the UK economy has almost “ground to a halt” while politicians argue over options for leaving the EU.
Chamber president Lesley Moody said: “Unfortunately, the picture that emerges from this set of results is not a positive one, with worrying downward trends in some of our key indicators. These trends are undoubtedly linked to political and economic uncertainty.
“Firms are reporting significantly slower sales both domestically and overseas than this time last year, while the future outlook for exports among our service businesses is particularly worrying.
“The warning signs are clear. I hope these results serve as a wake-up call to Government and politicians who continue to focus on Westminster squabbles rather than the real needs and concerns of businesses in regions such as ours.”
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The survey results showed uncertainty is also having an effect on North East businesses’ investment plans. Scores for both training and plant investment, while still positive, have fallen back by 7.6 and 6.4 percentage points respectively from the survey the Chamber carried out the same time last year.
Jonathan Walker, the Chamber’s assistant director of policy said: “Last quarter we saw clear signs of the impact of tightness in the regional labour market. This appears to have eased slightly, with scores for recruitment over the past three months also moving back.
“Determining the extent to which this is caused by a lack of available talent or economic uncertainty is difficult. However, skills shortages remain one of the most frequently cited barriers to growth.”
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