QES Quarter 3 2008 Results

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QES Quarter 3 2008 Results

Domestic economy under immense pressure

British Chambers of Commerce – Quarter Three Economic Survey 2008

The British Chambers of Commerce Quarterly Economic Survey (Q3 2008) received over 5,000 responses from businesses of all sizes and sectors.

2008 third quarter results follow worrying results from the second quarter. Virtually all the key national balances have worsened, and many are in negative territory.

The domestic economy is under immense pressure for the second quarter in a row, with the survey results showing that Lincolnshire is now in a worsening economic position.

Lincolnshire Chamber believes that if the Government and the MPC act immediately to return confidence to UK plc, a major recession can be avoided.

Businesses and consumers need a half-point cut in interest rates at Thursday’s MPC meeting.

Key results from the survey show:

Domestic balances, sales as well as orders, have moved deeper into negative territory, for both manufacturing and services
SME’s in both sectors, show negative Q3 domestic balances, which is a disturbing and unusual situation
Manufacturing export balances decreased in Q3
A decline in confidence across sectors
All confidence balances, turnover as well as profitability, were significantly lower in Q3, for both manufacturing and services
Cashflow balances remain negative in this quarter
Recruitment dip across sectors
Investment balances in plant and machinery moved into negative territory for the manufacturing sector, but the service sector remained in line with Q2 results.

Lincolnshire Chamber Chief Executive, Simon Beardsley, said, “We are clearly in a very difficult economic period but it is important that we retain a sense of proportion. Many parts of the Lincolnshire business community continue to perform well.

“Confidence is critical and it is vital that businesses are shown leadership. The Lincolnshire Chamber will be showing such leadership in the coming months.

“We support the national position that the Government needs to cut business taxes. The Bank of England need to cut interest rates immediately and local politicians need to get behind our Lincolnshire businesses in these challenging times. More than just growth makers – businesses are critical to our local communities.

“The results support the view that a UK recession has started in some areas and the downturn seems to be getting worse. The domestic economy is under immense pressure.

“The mounting global banking crisis reinforces our view that immediate threats to growth are more critical than dangers of higher inflation. Without forceful and urgent corrective action, there is a serious danger that the recession will deepen and cause significant damage to our economy.

“We support both the call for the MPC to cut interest rates without delay, with a half per cent cut on Thursday, and that over the next four months interest rates must be cut to four per cent as a minimum.

“The smooth flow of finance to businesses must be sustained at all costs. Any thought of early tax increases must be resisted.

“While a moderate recession is very probably unavoidable, the worst consequences can be mitigated if supportive business focused policies are adopted.”