Growth and business confidence 'stagnating' amid Brexit uncertainty

The British Chambers of Commerce’s quarterly survey – the UK’s largest private sector survey of business sentiment – saw the percentage of services firms reporting an increase in domestic sales and orders drop to a two-year low.

The study of 6,000 firms, together employing more than a million people across the UK, also saw recruitment difficulties in manufacturing at the joint highest on record and services sector recruitment difficulties hovering near a record high.

This comes despite Black Country Local Enterprise Partnership member Ninder Johal this week claiming companies will be able to grow and thrive this year.

The Black Country Chamber of Commerce’s policy officer Dan Turner said: “Brexit uncertainty continues to dominate political discourse and headlines. Businesses in the Black Country are growing weary and frustrated with the entire process.

“As a chamber, both locally and nationally, we are continually pressing for further clarity on a range of issues. As March 29 approaches, unacceptably, businesses remain in the dark about what a future relationship with the EU looks like. However, the results from our latest quarterly economic survey prove the resilience of businesses in the region.”

He added: “In terms of business forecasts for profitability and turnover, 93 per cent of respondents suggest that turnover will increase or remain constant, whilst 91 per cent outline that profitability will increase or remain constant.

“Overall, this is a cautiously optimistic picture of the Black Country economy. There is good news in terms of forecasts for profitability and turnover, but recruitment issues are at critical levels. The Government needs to be decisive and act quickly with regards to EU negotiations.

“Brexit’s political dominance is doing nothing to help fix the fundamental issues that our members are facing day to day. Issues such as transport and congestion, the apprenticeship levy, cashflow and late payment culture are all put on the backburner whilst the Government focuses on Brexit.”

Nationally in the services sector, a key driver of UK economic growth, the percentage of firms reporting an increase in domestic sales and orders weakened to their lowest levels in two years. Domestic activity among UK manufacturers also fell.

Labour shortages have risen in the UK as four-fifths (81 per cent) of manufacturers that tried to recruit reported difficulties in finding the right staff – the joint highest level since the survey began in 1989. In the services sector, the 70 per cent of firms struggling to find the right staff is close to the previous quarter’s record high.

After the publication of the report, the BCC called on all political parties to prevent a “messy and disorderly” exit from the EU. Avoiding a chaotic Brexit would bolster business confidence and investment, the group said.

Dr Adam Marshall, director general of BCC, said: “The UK economy is in stasis. While it’s not contracting, it’s not growing robustly either.

“Throughout much of 2018, UK businesses were subjected to a barrage of political noise and drama, so it’s no surprise to see firms report muted domestic demand and investment.

“The Government must demonstrate it is ready to act to turbo-charge business confidence.”