St Helens Quarterly Economic Survey for the first quarter of 2019 reports a steady picture, with no major downturns, but many businesses fear for future revenues. Tony McDonough reports
Companies in St Helens remain resilient despite the uncertainty over Brexit – but both manufacturing and services firms are feeling less confident about turnover and profitability over the coming months.
The St Helens Quarterly Economic Survey for the first quarter of 2019 reports a steady picture, with no major downturns at home or away. However it does show businesses are having problems finding the right staff across the board.
And it says 50% of manufacturers are reporting increases in domestic sales over the last quarter and all other indicators remain positive, although manufacturing domestic advance orders for the quarter ahead are only at +12% – a big fall from +29% in the last quarter of 2018.
There are some warnings on the horizon however with both manufacturers and services companies feeling much less confident about turnover and profitability into the future.
Cashflow has become a major concern with 0% change in manufacturers and -10% change in services firms. This possibly results from firms stocking up to insure against Brexit turmoil, and whether they can pass on their cost increases.
This quarter, the likelihood of prices rising has fallen, lessening the inflationary pressures in the economy, but affecting profitability and room for expansion. In another note of caution, expected levels of investment in plant and machinery, and in training, are all down compared to figures from the end of 2018.
On a more positive note 21% of manufacturers and 14% of service firms still expect to increase their workforce over the next three months. 24% of manufacturers also reported an increase in their workforce in quarter one and there is an increase in the number of manufacturers working at full capacity.
Tracy Mawson, deputy chief executive at St Helens Chamber, said: “It is reassuring to see that despite years of Brexit drama, local businesses are not feeling the strain too severely. While the chaos in Westminster continues to unfold businesses and communities in every part of the UK are still unsure about when the future starts – let alone what it holds.
“The next few months will be a tough period for many in business who will be forced to take difficult decisions due to factors far beyond their own control, but the chamber will endeavour to offer any support we can to local firms.
“Brexit aside, what is troubling is the number of firms who are still struggling to recruit new staff. 76% of manufacturing firms and 53% of service firms reported difficulties in finding the right people this quarter – these are significantly high numbers.”