Lancashire’s economy is making progress – but risks at home and abroad could still derail the recovery, finance experts have warned.
The latest Lancashire Quarterly Economic Survey (QES), released this month and compiled by the county’s three Chambers of Commerce and Moore and Smalley Chartered Accountants, shows that most key balances strengthened in the second quarter of the year compared to the previous one.
The export balances remain strong, with the manufacturing export sales balance reaching its highest level in two years.
And the findings suggest that the economy will continue to strengthen gradually over the next year, with growth slowly improving.
A statement from the report’s authors said: “The results also demonstrate resilience among Lancashire businesses, who continue to feel confident and are looking to invest and increase exports this year.”
Key findings in survey include:
• Export balances are improving: manufacturing sales increased 18 points to +27 per cent, whilst orders went up by eight points to +16 per cent. The service sector sales balance went from neutral to +6 per cent and orders also rose six points to +9 per cent.
• Business confidence has again increased, and is now at its strongest since the inception of the Lancashire QES report in 2011. Manufacturing confidence that turnover will improve rose seven points to +57 per cent and service sector confidence rose eleven points to +49 per cent.
• The investment picture is mixed. While the balance of manufacturing firms looking to increase investment in plant and machinery rose eleven points to +23 per cent, for services it fell one point to +3 per cent.
• In addition, 41.9 per cent of firms believe that a lack of consumer confidence is the biggest barrier to growth.
“Overall, the Q2 results support our view that the economy will gradually strengthen over the next year, but challenges remain,” the report added.
Babs Murphy, chief executive of the North and Western Lancashire Chamber, said: “Despite gloomy media headlines in recent months, our economic survey once again shows increased business confidence.
“It is incredibly encouraging to see export sales improving, and the upturn in employment balances is reassuring in spite of the risks at home and abroad.
“However, falls in the service investment balances and the weak cashflow balances in both sectors are a warning that economic growth could be slow, and a reminder that a sustained upturn cannot be taken for granted.”