pro·manchester members less optimistic about prospects

Over the past three months pro·manchester members have become less optimistic about prospects for the economy according to the latest Business Conditions Survey.

Prospects for business in the UK recorded a net balance of just 15.4% compared to a previous 50.4% and export prospects slumped to 5.7% from 28.1%. 50% of businesses expected to increase turnover in the next twelve months compared to 70% in the earlier poll.

As a result employment prospects fell. Just 34% of members were expecting to increase staff compared to 48% in the prior poll.

When asked which are the areas of greatest concern, competition was the most cited at 58% (45% last time), inflation problems were rising at 46% up from 39% but fears of a rise in interest rates fell back from 34% to just 14%. Taxation remained an evergreen problem at around 20%.

Over the past three months, 49% of members recorded an increase in turnover in line with the earlier survey. 14% of members recorded a fall in turnover compared to just 9% last time.

Pressure on prices were pretty much the same as the previous quarter, major concerns were general overheads (61%), pay settlements (24%) and finance costs (22%) the major concerns.

The number of firms reporting an increase in cash flow overall (net basis) was down slightly from 31% to 20% this together with prospects hit investment plans slightly down from 37% to 31%. The sector remained committed to training with problems recruiting staff persisting especially in the managerial and professional sectors.

John Ashcroft Chief Executive of pro·manchester said “Concerns about prospects are the major problem with the number of firms expecting an increase in UK sales falling from 58% to 35%. Despite the weakness of sterling, the number of firms expecting an increase in export turnover has fallen from 38% to 17%. Most firms now expect interest rates to remain on hold but concerns about inflation have increased significantly.”

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