Political uncertainty and rising inflation pose risks to the economy

A LEADING figure at St Helens Chamber says urgent government action to boost business growth and confidence.

St Helens Economic Survey findings for April to June 2017 painted a sluggish picture, with little change to the key economic indicators, particularly in services.

The findings were published as the latest economic data suggests the UK economy is entering a more challenging period.

St Helens Chamber pointed to higher inflation as a key business concern as it squeezes margins and weakens businesses’ ability to invest, particularly during a time of heightened political uncertainty.

The survey showed that while some local businesses are cautiously optimistic for their own prospects, they remain wary about the growth prospects of the UK economy as a whole.

Tracy Mawson, deputy chief executive of St Helens Chamber, said: “In the wake of an inconclusive general election, wariness increases as does the sense that the UK economy is treading water. With inflationary pressures expected to intensify and consumer spending forecast to slow, the outlook remains mixed at best.

“With details of the terms of Britain’s exit from the EU still to come and general volatility in the economy, there are risks to the economy.

“However our businesses have been operating in this environment for some time now and they are taking it in their stride, staying focused on what they can control and on their business.”

The survey suggested manufacturing output showed further growth in the second quarter of 2017 (quarter two), but conversely, advance domestic orders plummeted for the second quarter in succession.

For St Helens manufacturing, export sales picked up but advance orders fell in quarter two as currency volatility remains a big concern for some businesses that trade internationally.

On a positive note, employment growth remains steady for both the manufacturing and service sectors and the number of firms working at full capacity has increased.

Capital investment plans improved for manufacturing but the service sector remains more cautious.

Ms Mawson added that the recent election campaign had almost no focus on supporting business and that the cost of doing business in the UK is too high – and weighs on the “investment, recruitment and growth capabilities of our firms”.

She said: “Companies are faced with significant currency fluctuations and rising upfront costs, and their growth efforts are hampered by skills shortages and poor physical and digital connectivity.

“Westminster must come together to tackle these issues, which together with a pragmatic and economy-focused Brexit deal, will give business communities the best opportunity to foster lasting growth across the UK.”

St Helens Chamber will work with the British Chambers of Commerce to articulate the concerns of businesses at the highest level of Government.


Leave a Reply

Your email address will not be published.

fifteen + 4 =