News / Business West
‘Bitterly disappointing’ quarter for business in the West
Firms in Bristol are being hit by a downturn in sales and continued Brexit uncertainty, according to recent research.
A quarterly survey by Business West revealed a “bitterly disappointing” set of results, as one in three companies reported a drop in European exports, while UK orders were down seven per cent on the previous quarter and eight per cent on the same period last year.
The findings from the study of 500 firms across the region is backed up by the latest NatWest PMI (purchasing managers’ index), which found renewed decline in output and new orders and a slight drop in staffing levels, while input costs continue to rise steeply.
Phil Smith says action is needed to get businesses investing again
Commenting on the Business West findings, managing director Phil Smith said: “A bitterly disappointing set of results this quarter suggests that paralysis in parliament and Brexit uncertainty are having a dampening affect across all areas of business activity in the West.
“If these figures are to be believed, it appears that not only has the domestic market fallen flat, our global business is suffering as the UK’s exit date creeps ever closer, but without a clear signal from government that we’ll be leaving with a deal.
“It is clear that government needs to act to stabilise business confidence at home and abroad. Action is needed to get businesses investing again and to convince customers overseas that the UK is a reliable and attractive place to do business.
“As chaos reigns in Westminster, it seems businesses in the West are having to deal with the repercussions.”
Business West’s quarterly survey provides a snapshot of business confidence and trading conditions during the past three months and results feed into the British Chambers quarterly economic survey, which is one of three surveys regularly reviewed by the Bank of England when setting monetary policy.
Of the 500 companies that took part in the research, 55 per cent said that Brexit will have a negative impact on their business, whereas less than eight per cent believe it will have a positive impact.
Chris Preston, chair of the NatWest South West regional board, also blamed Brexit for the deterioration for businesses, saying: “The South West had a disappointing end to the first quarter of 2019, with firms signalling renewed falls in both business activity and new orders in March.
“Companies often blamed the deteriorating business environment on lingering Brexit uncertainty, which has led many clients to press the pause button on any projects until the outlook becomes clearer. As a result, firms trimmed their staffing levels for the second month running.
“As well as lower amounts of new work, companies signalled a further squeeze on operating margins, as input costs continue to increase at a notably sharper pace than output prices. However, firms are likely unable to hike their charges at a quicker pace without the risk of losing more business.
“Going forward, it seems that the South West private sector may continue to struggle unless the UK’s exit from the EU becomes clearer and confidence is restored.”
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