The ongoing Brexit impasse is causing "relentless" uncertainty for business amid a manufacturing slowdown and skills shortage, a report has revealed.
The British Chambers of Commerce (BCC) has claimed the uncertainty means rising business costs and tougher global trading conditions for the economy.
The results of the latest Quarterly Economic Survey were discussed at the Liverpool Chamber Economic Business Breakfast on Friday, which was chaired by BusinessLive editor Alistair Houghton.
At the event, it was revealed that the national picture is also reflected in the Liverpool City Region.
According to the chamber, in the manufacturing sector, the balance of firms reporting growth in domestic sales fell for the third successive quarter and is now at its weakest for three years, since the second quarter of 2016.
The balance of firms reporting an increase in export sales also dipped to a three-year low.
It comes after the new Prime Minister Boris Johnson ramped up his no-deal Brexit threat in his first Commons statement on Thursday, promising to make the UK the "most prosperous economy in Europe" over the coming decades.
Speaking about the results of the survey, Suren Thiru, head of economics at the BCC, said: “These results indicate that underlying economic conditions in the UK remain decidedly downbeat, with intensifying uncertainty over Brexit, the rising costs of doing business in the UK and a sluggish global economy combining to suppress key drivers of growth.”
Paul Cherpeau, chief executive of Liverpool Chamber of Commerce, said: “The second quarter set of results clearly show the pressure being felt by our member businesses. Not only is Brexit uncertainty affecting confidence, both at home and abroad, but our region is also struggling to find the workforce resource that will boost productivity and profit in the long-term.
"It is vital that the Government puts in place robust plans that will unlock our trading future and the talent pipeline for businesses.”
The survey, which was for the second quarter of 2019, is the largest private sector survey of business sentiment and a leading indicator of UK GDP growth.
It said the services sector saw a slight increase in the balance of companies reporting higher domestic sales and orders, as well as export sales and orders.
However, the increased activity was not enough to outweigh the significant drop in these indicators in the first quarter ahead of the original Brexit deadline in March, and so all remain very weak by historical standards.
Alongside the report, the Chamber of Commerce’s Workforce Survey shows that businesses in the North West are suffering from a skills gap in the local economy.
60% of businesses reported that it takes them longer to fill vacancies than it did five years ago, which is allied with 46% reporting increased staff training costs and 50% of businesses spending more on recruitment.
Reacting to the results, Dr Adam Marshall, director general of the BCC, said: “To boost and incentivise investment, our business communities are looking for a bold growth agenda here at home. The next government must hit the ground running and introduce measures to reduce the upfront cost of doing business, deliver major infrastructure projects, and unblock the arteries of Britain’s skills and immigration systems.”
