West of England economy stalls amid Brexit uncertainty
Business West’s latest survey of over 550 businesses has found that even before the EU Referendum, the West of England economy was showing signs of slowing after a positive start to the year.
The regular survey of companies in Bristol, Bath and the South West in May and June found that:
- Domestic sales (39%) and orders (34%) fell by four and six points compared to last quarter.
- International sales dropped seven points to 32%, and orders fell eight points to 29%.
- Under a third of firms (29%) recruited in the last three months, and recruitment intentions dropped by four points to 30%.
- All major indicators were below levels seen this time last year.
- Business confidence fell by three points, however almost two thirds of businesses remain confident about the year ahead.
Commenting on the results, James Durie, Chief Executive of the Bristol Chamber of Commerce and Initiative, part of Business West, said:
“It’s early days to properly understand what impact the EU Referendum decision has had on business across the South West, beyond that it shows a short term stalling. And our latest survey shows that our region’s economy showed signs of slowing amid the uncertainty leading up to the decision.
“After a strong start to the year, recruitment intentions fell and firms reported drops in both domestic and international orders ahead of the momentous vote.
“Since the Brexit decision a number of local companies have been telling us that they have decided to lay off staff, raise prices, or scale back on investment plans – amongst a range of responses that also include opportunities to take advantage of the weaker pound.
“Most groups questioned by Business West believe that, despite the current uncertainty, in the long term the future is bright and that British companies are resilient enough to deal with any temporary downturn.
“As the impact from the Brexit decision continues, we want to hear how the result has affected local businesses in terms of confidence, investment and recruitment decisions, both positive and negative. It’s quick and easy to do via contacting our Policy Team and enables us to better represent you and our business community. We can ensure you get regular reports back.
“Although the results of this survey will be met with some concern, there are still reasons to remain confident. In the West of England we have the best performing economy outside the South East and, as a strong trading city and region, we have great opportunities to build stronger exports overseas. And a week after the referendum, we saw Bristol, South Gloucestershire and Bath & North East Somerset Councils vote to push ahead with the £1 billion West of England devolution deal. The creation of a new mayoral combined authority by May 2017 will give this area the chance to put significant investment into priority areas for business, such as transport, housing and skills.
“The business community has backed the devolution deal right from the start and believes it will strengthen this area for the long term and benefit everyone who lives and works here. This deal now going ahead sends out a strong signal of long term confidence and investment.”