Chamber economic survey shows improvements as well as future concerns
Date published:
Economic survey results released today (13 January 2023) by the North East England Chamber of Commerce show that there have been improvements in areas such as investment and cashflow in the last quarter but that businesses are concerned about future rising costs.
The survey shows businesses continuing to take positive action to deal with the impact of energy price rises. Businesses are also increasing investment in plant and training plans, a positive indicator of business health in difficult economic circumstances.
Conditions are more mixed in sales and orders, export sales and orders have improved whereas UK sales and orders have declined.
Business concerns have increased in all areas relative to last year except red tape. Around 90% of businesses said that inflation and energy prices remained the top two concerns. In addition to this, concerns between manufacturing and services firms have diverged. Services firms are more concerned about staffing, and manufacturing firms are more concerned about taxation and exchange rates.
Andrew Haigh, Chamber President (Newcastle Building Society), said: “Even as we enter a recession, many of the indicators in this quarter’s economic survey suggest that there are at least some signs of improvement over the previous outlook for business in the North East. The overall outlook continues to be one of concern, but this quarter’s results do suggest that while inflationary pressures remain, some of the more extreme impacts are continuing to ease.
“These points of optimism are vital for businesses in our region, as the general decline across indicators of future activity and performance reflect how concerned organisations are about 2023.”
82.2% of businesses said they had taken action to try to reduce expenditure on energy compared to 73.0% in Q3, a quarterly increase of +9.2%.
While short-term adaptation strategies are still common, the data suggests businesses are attempting to respond to high energy costs with longer term strategies for mitigation and energy efficiency.
Andrew Haigh said: “It will be important to monitor how businesses respond to these evolving challenges through 2023. As a Chamber, we will continue to use this insight to represent business concerns regionally and nationally. As ever, we are stronger together.”
Durham University Business School is the associate sponsor of the survey.
Download the full survey report here.