THE pace of local economic growth continued to slow in the third quarter of the year in Derbyshire and Nottinghamshire, according to the results of the region’s biggest business survey.
The Derbyshire and Nottinghamshire Chamber of Commerce’s latest Quarterly Economic Survey shows that there was only a small growth in the local economy during the third quarter of the year.
UK sales saw significant drops across the board, with the biggest falls amongst Nottinghamshire firms and the manufacturing sector, with advance orders for the next three months also down.
Export sales and orders also fell in the same county and sector, but were offset by increased sales and orders in Derbyshire and the service sector. The quarter also saw a net 12% drop in the number of manufacturers operating at full capacity.
Sales to a number of Arabic countries are starting to recover but this has been offset by a slowdown in global markets. Manufacturing export sales and orders fell by 9% and 10% respectively. This was offset by increases in service sector businesses exporting as a response to declining home sales.
On a more positive note, the percentage of businesses looking to recruit during Q3 rose to its highest level since September 2008, with 44% of Derbyshire firms firms attempting to take on more staff. And around 20% of local firms still plan to increase the size of their workforce between now and the end of the year. However, this is not translating into a significant increase in overall employment, as those expanding are taking on less new workers than the number of jobs being cut.
Looking ahead, confidence in expected turnover in the final three months of the year has fallen overall, whilst confidence in profitability is also down slightly, indicating that firms, particularly manufacturers, are looking ahead with less optimism.
And over the next 12 months, more than 53% of local firms expect securing orders to be the biggest challenge to their business, with 41% worried about increasing input prices, 35% concerned about spiralling energy costs and 34% about a lack of consumer demand.
Commenting on the results of the survey, George Cowcher, Chief Executive of the Derbyshire and Nottinghamshire Chamber of Commerce, said: “Once again, the slowdown in economic activity in Derbyshire is disappointing, although perhaps not unexpected, given the national economic situation, the continued uncertainty in the global markets and the ongoing crisis in the Eurozone.
“The pace of UK growth has been slow for a number of months now, but businesses have remained optimistic about their future prospects. However, we are also seeing business confidence starting to wane a little. That is a concern and needs addressing with utmost urgency.
“Whilst we recognise that the Government has made good progress in the way it has set about cutting the deficit, we are still waiting to see hard evidence of the pro-growth credentials it promised in the Coalition Agreement when it came into power.
“Businesses keep telling the Chamber that they are still mired in red tape and this is a significant challenge for the next year. They are willing to create jobs, but often struggle to find and recruit the right calibre of employee equipped with the skills and qualifications they require.
“If the Government truly wants private sector business to drive future economic growth, then it must re-focus its efforts on enabling firms to create the employment, wealth and economic activity needed to sustain and secure the recovery. Any obstacles which stifle growth or hamper businesses in their efforts to create jobs, invest and export must be removed.”