Sussex business in 2012 - ‘year of extreme uncertainty’

MARK Froud, the Chief Executive of Sussex Enterprise, the county’s chamber of commerce, looks back at how the key local, national and global events of 2011 have affected Sussex businesses. He also outlines his predictions for local firms and the economy over the next 12months.

“While 2011 was a very tough year for everybody, in Sussex I think that we can look back with pride at how well we did. This might seem a strange thing to say, but relatively speaking with the economic and social carnage going on around us we were towards the top of the league in the UK.

“We had the economic hangover from hell to contend with. Whatever, your politics we can now see that a tight budget has meant that our national credit rating (AAA) has remained strong and we now as a country pay a lower interest rate than Germany for our debt. And boy is it a big debt (Over £1 trillion). We also have the lowest interest rates in the World. Unlike our Eurozone partners whose politicians do not appear to be able to make a decision and then stick to it. Hence they are now paying more to borrow than we are.

“The reduction in our exchange rate by some 25 per centin 2007/2008 meant that last year was a good year for many of our manufacturers. And overall, although we do not have the data yet, I am convinced that in Sussex we fared far better than most parts of the UK with employment actually going up.

“There were positive signs in 2011. The banks, after three years of rebuilding their own balance sheets, were back in the business of lending. Trouble is the rest of us have lost the appetite. That does not mean they got decisions right every time, but they have allowed their local managers more flexibility (as called for by Sussex Enterprise two years ago). Rates and charges still to me seem to be too high, but with more competition these should come down.

“The Government formed Local Enterprise Partnerships. There are two that cover Sussex. One that covers Lewes, Brighton and Hove and West Sussex is private sector led and focuses on exporting and on entrepreneurship (based on ideas developed by Sussex Enterprise). The other covers East Sussex and has less of a dominance of the private sector and more dominance from Kent and Essex who are the other areas involved. These partnerships are there to drive the rebalancing of the economy. However, they have few tools or resources. The Government have only just worked out that they need some money to get the economy moving.

“During the year we have seen our local authorities and their councillors recognise strongly the importance of the local economy to the well-being of the communities they serve. The best examples of this were the erection of a wind turbine at Glyndebourne and the granting of planning permission for the development of the Sussex Mushrooms site and Thakeham. Between them these two businesses employ close to 1,000 people. Both of these were actively supported by Sussex Enterprise.

“2012 will be a year of extreme uncertainty. As we enter it the Eurozone politicians seem to have reached agreement. But they need to stick to it and take some difficult economic medicine. If they do then waters will be calmer than we feared. The inflation and interest rate outlook in the UK looks benign with both being low. Our members tell us that in Sussex we can expect 1-1.5 per cent growth (almost twice as fast as that nationally) and that they expect confidence to return slowly during the year.

“The key issues holding businesses back remain: the skills of those leaving school and those not in work; the slow speed of broadband in many parts of Sussex; and the level of unnecessary and pointless bureaucracy that stifles innovation and growth.

“So the three priorities for Sussex Enterprise in 2012 are to tackle these three problems. Each of them are long-term and have been intractable, but I sense there is a willingness to take these problems out of the too difficult to do box and do something about them.”