Manufacturing outlook in Suffolk gives ‘real reason for optimism,’ chamber says

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Manufacturing companies in Suffolk are outperforming the rest of the UK, but the county’s service sector is more sluggish than the rest of the UK.

The findings from the Suffolk Chamber of Commerce’s first economic quarterly report of 2013 have now been published.

Dr Peter Funnell, chamber president, said: “The latest report from firms across Suffolk continues to provide real reason for optimism.

“As the results for the last five or six quarters have shown, the local economy is moving forward but the economic recovery is yet to genuinely take off.

“When we see both the manufacturers and the service sector making real progress together for two quarters or more then we will know the recovery is really under way.

“It is really heartening to see the consistent and improving performance of manufacturers in Suffolk, both in domestic markets and abroad

“Local manufacturers across many indicators are doing better than the sector nationally.

“This is particularly true for exporters where export orders are now running at an all time high level.”

The chamber survery found high levels of confidence going forward, particularly in turnover where optimism now stands at the highest level since 2007.

Manufacturers continue to be concerned about cash flow, exchange rates in foreign markets and business rates at home.

“We have consistently called for the government to freeze the level of business rates and our members continue to register their concerns with the cost of rates,” Dr Funnell said.

The service sector saw a disappointing drop in deliveries – however there was a stable position for domestic orders.

There was a similar position with export markets with drops in both deliveries and orders.

Employment in the service sector fell over the first quarter but prospects for the next three months are ‘cautiously optimistic,’ the chamber said.

Investment in plant, machinery and staff training has improved and remains much higher than the national figures. However, confidence within the service sector has taken a knock. The chamber reported there is less optimism around turnover and profitability than might have been expected.

The service sector also has concerns about cash flow.

“The last 12-18 months have been a hard slog for UK firms. In Suffolk too there have been set backs at various times but, if nothing else, our surveys demonstrate the continued resilience shown by local firms,” said chamber Chief Executive John Dugmore.

“We continue to see positive signs but we are still struggling to find that consistent and robust growth across the whole economy.

“That is why we continually challenge the Chancellor to find ways of facilitating and supporting enterprises. We need to do more to nurture our wealth creators.

“It remains crucial for local firms to see positive moves from local and national government to maintain confidence. This includes continued actions on skills, infrastructure and business financing,” he said.