QES Q3 2016: Lincolnshire economy stabilising after Brexit vote

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The latest Lincolnshire Quarterly Economic Survey has shown signs that the local economy won’t feel yet the full impact feared from the Brexit vote.

Conducted by the Lincolnshire Chamber of Commerce in conjunction with Lincolnshire County Council and the University of Lincoln, the results of the survey show that UK sales and orders have improved slightly over the past three months.

Overseas sales and orders are also improving following a drop in the run up to the Brexit vote, the limited survey suggests.

Simon Beardsley, Chief Executive at Lincolnshire Chamber of Commerce, said: “In the run up to the Brexit vote we saw rather disappointing results around sales and orders, both home and overseas.

“But this quarter’s results show a swing back to a more measured outlook, even though businesses are still feeling twinges of uncertainty as to what lies ahead.”

Simon Beardsley, Chief Executive of Lincolnshire Chamber of Commerce Photo: Steve Smailes for Lincolnshire Business

Simon Beardsley, Chief Executive of Lincolnshire Chamber of Commerce Photo: Steve Smailes for Lincolnshire Business

Workforce has seen some small but positive changes in the last three months, with a stronger focus on future workforce figures which commentators believe is a result of businesses not actively recruiting in the run up to Brexit.

Cash flow and investment is also improving from the last quarter, with a 13% increase in the number of businesses stating that it has either improved or remained the same in the last three months.

The number of businesses reporting a worsening position fell to just under a quarter, down from a third last time.

Whilst this quarter has seen an increase in the proportion of businesses revising down capital investment plans, the overall number still remains positive, and therefore signifies growth.

After a small fall last quarter, the proportion of businesses stating they are operating at full capacity has increased slightly to 21%.

Looking ahead the survey highlighted businesses were most concerned about exchange rates, over any other business condition. Overall, businesses appear to be wary about the next 12 months despite the improving figures.

Heat map showing the percentage of service sector attempting to recruit in Q3 2016 by region. Graphic: British Chambers of Commerce

This heat map shows the percentage of service sector rms attempting to recruit sta in Q3 2016 by region

Simon continued: “Looking at the results its clear to see that Brexit hasn’t led to any significant trend changes, even when we cross reference that data back to the early days when the survey first started in 2009.

“Having said this, businesses are looking for a timetable of change, and some direction on policy and legislation from EU to UK laws.

“We have to expect some elements of unforeseen circumstances, which will need addressing as and where they occur.”

Dr David Gray, Joint Head of Finance and Economics, at Lincoln International Business School, University of Lincoln, said: “There seemed to be an air of excessive pessimism around the Brexit vote and the campaigns in the run up to it, which saw a drop in sales especially in manufacturing. But in the three months from August we see a bounce back from businesses, which isn’t back on trend yet, but it’s getting close.

“However we may have to brace ourselves for another swing in results when Article 50 is triggered as that could reignite uncertainty among businesses.”