Economy Shows Impact of Brexit but Confidence Remains High

Date: 18/12/2018
Author: GMCC
Company: GMCC

Greater Manchester Chamber’s latest Quarterly Economic Survey (QES) shows the economy is feeling the impact of Brexit but business confidence is still high.

The QES reveals a fall in domestic sales across the board in the last quarter. The Construction sector fell back to where it was six months ago but is still historically strong and Services and Manufacturing both saw minor falls in demand.

When it comes to International sales and orders, Construction saw a dip and the export position remains negative. Manufacturing performance continued the trend seen for the last few years of growing and contracting in almost equal measures, while the Service sector continued to grow at the same steady level as the past two years.

Exchange rates continued to fluctuate significantly due to Brexit uncertainty and US tariffs, leading to increased concerns from all sectors.

However whilst overall performance is, at best static, the Manchester Index™, which combines seven key indicators taken from the QES, stood at 33 in Quarter Four – a slight dip from the record high of 33.6 last quarter but is a sign that business confidence remains high given the febrile political climate and challenging economic conditions.

Chris Fletcher, Marketing & Campaigns Director at Greater Manchester Chamber, said: “Business confidence in Greater Manchester remains high given the political climate and the ongoing seemingly never-ending plot twists around Brexit.

“Brexit and skills shortages are still the biggest issues for our members. Patterns are now starting to emerge in the QES due to the effect of Brexit. Firms, especially in Construction, seem to be switching their attention to the domestic market, job applications from the EU have fallen and lots of members are either holding back on making decisions or being held up by others in their supply chains uncertain about what the next 6 – 12 months will bring. Without a clear way forward this will lead to further stagnation and what are currently small issues will expand into deep-rooted long-term threats to economic growth.

“Speaking with members they really do need the politicians to get the current impasse sorted, then there can be a stable platform to build on for the future. Political point scoring and arcane parliamentary laws and procedures don’t really mean that much if you’re faced with some stark choices about your future business strategy and people's livelihoods."

The Quarterly Economic Survey is the UK’s largest and most reliable business confidence survey. It is the first to be published in each quarter and is used by key policy makers to determine economic decision-making.

The Greater Manchester QES alone has the same sample size as other national business surveys.