BUSINESS confidence in Sussex has fallen marginally according to the British Chambers of Commerce Quarterly Economic Survey, published by Sussex Enterprise.
The survey is one of the most respected of its kind. It gives ‘a clear and accurate portrait of business confidence’. As a result, it is used by government ministers, senior policy officials and key decision makers to inform strategic choices at the highest level.
The survey of 150 Sussex firms indicates the following:
Business confidence falls: The QES figures suggest that Sussex businesses are much less confident of increasing their expected turnover and profitability over the next 12 months, than they were in Q4 2010. Sussex’s turnover balance dropped by 29 points, to +11% and profitability confidence fell by 22 points to -10%. Lower business confidence negatively impacts businesses decision-making, recruitment and investment.
Domestic market: The home balance figures fell for sales and orders during the last quarter. Sussex’s home sales balance dropped by 25 points to -12% and home orders balance lost 22 points, to -16%.
Exports: The export figures fell slightly for sales and orders during the last quarter. Sussex’s export sales balance dropped by 16 points to 11% and export orders balance lost 16 points, to 17%.
Employment expectations: The employment balance among Sussex firms fell by 13 points, to -6%. Figures for the last three months suggest the employment expectations balance has remained static, with no change at 17%, demonstrating neither growth nor contraction.
Cashflow: Figures for the last three months suggest that cashflow among firms in Sussex worsened – the balance for Sussex dropped by 23 points, to -27%.
More pressure to increase prices: Figures show the balance of Sussex firms wanting to increase prices has risen by 13 points, to 39%. 48% of these firms state raw material costs are adding to pressures on them to increase prices.
Commenting on the results, Mark Froud, Chief Executive of Sussex Enterprise said: “There have been a number of business surveys in recent months giving conflicting views, pointing to a choppy economic environment at the start of 2011. These figures show businesses are still facing real difficulties in managing cashflow. The figures suggest business cashflows have been badly affected by recent shocks such as adverse weather conditions, and the VAT increase. In addition, rising raw material costs mean firms are more likely to raise prices. The export balances remain stronger than the home balances and this suggests a sluggish domestic market, with businesses more likely to see growth from overseas than at home.”