Lancashire businesses hit hard by lockdowns and Brexit red tape, QES survey shows

The ongoing lockdown and increased difficulties with exports thanks to Brexit undid the good work that saw strong recovery in the second half of 2020, for manufacturing sales, according to the first Quarterly Economic Survey from the chambers of commerce for 2021.

The survey, a three monthly gauge of how business and the economy are performing, showed that the service sector has shown improvement in UK sales but fewer firms have experienced growth than have seen a decline. Service exports have worsened with post-Brexit status of services still unresolved.

Companies responding to the quarterly survey said that both manufacturers and service businesses are experiencing increasing difficulties in recruiting staff.

Cashflow too was said to remain a problem for both sectors, particularly service. Firms expect prices to go up, with pressure on raw materials for manufacturers a major concern.

However, most firms expected the next twelve months will be better than the last with both sectors predicting an improvement in turnover and profitability.

Babs Murphy, Chief Executive at the North and Western Lancashire Chamber of Commerce said: “The situation in Lancashire is similar to that seen across the North West and the rest of the UK.

"Firms are still finding conditions tough but see signs of recovery. However, Lancashire is in a good position compared to other areas. Both the North West region and UK are showing worse figures for current trading and less confidence in the recovery. This puts the county’s businesses in an excellent position to bounce back quickly and well."

Geoff Mason, policy manager at the Lancashire chamber said: "With continued restrictions and weakened exports the first quarter has been tough for businesses in all sectors. Exporters have seen struggles with new trade procedures with the EU and reduced orders due to stockpiling before the end of 2020.

"There is hope that some of the issues will resolved and orders will return to normal over the next few months. However, for this to happen it is essential that the government listens to feedback from exporters to help them out.

"Many hope that once the economy re-opens it is for good. To ensure this outcome, it is essential the vaccination programme continues apace and that re-opening is accompanied by increased workplace testing.

The government has already listened to our calls for an extension in workplace testing; this needs to be followed through until the situation is over.”