MIXED FORTUNES FOR NORTH WEST BUSINESSES

24/10/2006

Companies in the North West are experiencing mixed fortunes, according to the latest survey of the region's businesses.

The Quarterly Economic Survey carried out by Chambers of Commerce of Commerce North West shows manufacturers enjoyed improved sales in the UK market but a drop in orders. Those who exported reported a slight improvement in both orders and sales.

In the service sector the number of firms reporting an increase in sales has fallen while orders have remained static. Fewer firms are attempting to recruit and those that are recruiting have experienced increased difficulty. Confidence improved slightly, continuing the stability in business confidence felt for over a year now. The picture for manufacturing is different, with there being a fall in confidence about turnover but a rise in confidence of profitability.

Dr John Risk, Economic Adviser to Chambers of Commerce North West, said

“The survey shows companies are experiencing mixed fortunes.”

“Many businesses are suffering at the moment. They are concerned about the recent rise in interest rates and they expect another rise is on the way. Borrowing costs are at a six-year high and the current rise in sterling is squeezing exporters' margins.

“More firms are now predicting an increase in prices over the coming months, as a necessary measure to combat pressure at the margins, which may only add to inflationary pressures.

“The crucial factor as to whether rates should rise is labour cost, until there is firm evidence that businesses are facing increasing wage pressures then there is no need for interest rates to rise.”

Download a copy of the QES results for the 4th quarter of 2006 here