Brexit uncertainty is continuing to affect businesses, but long-term confidence is still strong, according to Greater Manchester Chamber’s latest Quarterly Economic Survey (QES).
In Q1 of this year, growth was led by manufacturing output as some businesses stockpiled goods due to fears of a No Deal Brexit, but growth in Q2 has been led by services.
The Greater Manchester Index, a combination of seven key indicators taken from the QES, went up from 19.6 in Q1 to 26.7 in Q2.
The key findings of the QES included:
- International sales have increased in both manufacturing and the services sector
- Consumer spending has gone up slightly and there has been an increase in advance orders
- The construction sector continues to perform well despite some city centre projects coming to an end and will be boosted by upcoming infrastructure projects
- There has been employment and wage growth, but recruitment difficulties remain, particularly in manufacturing and construction
Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce, said: “The growth in manufacturing output that we saw in Q1 was probably due to the stockpiling of goods that we saw as a result of fears of a No Deal Brexit. We may see more of this as the government seeks to ensure the country has adequate stocks of essential goods such as medicine.
“Despite continuing fears over Brexit, long-term confidence in Greater Manchester remains strong, employment is rising and wages are growing. Unfortunately, those employers that are recruiting report difficulties in finding qualified staff – more than 90% of employers in the construction sector reported it as an issue. This difficulty in recruiting is worrying as it hampers economic growth.
“We have seen an increase in consumer spending, which is a major contributor to GDP. However, this will be affected in the next few months by the weather as a good summer always boosts the hospitality sector.”
The QES forms part of the UK’s largest and most reliable business confidence survey, which is the first to be published in each quarter and is used by key policy makers to determine economic decision-making.