The latest Quarterly Economic Survey from the Chamber of Commerce suggests a further slowdown in Lancashire economy in the latter part of the year with most key balance measures down on previous levels.
The Q4 survey, compiled by the county’s Chambers of Commerce in association with MHA Moore and Smalley Chartered Accountants and Business Advisors, shows that sales at home and abroad weakened compared to the previous quarter, although manufacturing performance was still strong by historical standards.
In the service sector, the main driver of the economy, growth remains muted and is below historic averages. The proportion of firms confident that turnover and profitability will improve this year had decreased, and there was also a notable decline in employment balances.
Investment intentions were also down on the previous quarter and firms are still under considerable pressure to increase prices with 43 per cent of firms expecting to increase the price of their goods and services in the next three months.
Raw material costs and exchange rate fluctuations are of concern to manufacturers, while overhead costs and inflation have a greater impact on service businesses.
Alan Welsh, policy manager at the North and Western Lancashire Chamber, said: “The results of our fourth quarter survey are in tune with OBR forecasts for slow growth in the coming months.
“Household incomes and spending are being squeezed by higher inflation which is a major concern, especially for consumer-facing businesses.
“Whilst business confidence remains relatively high, some of the previous optimism that turnover and profitability will improve is beginning to evaporate as businesses come under more pressure from increasing costs, higher wage demands, and difficulties recruiting skilled employees.”
Stephen Gregson, corporate finance director at MHA Moore and Smalley said: “An interesting set of results, although perhaps not for the right reasons.
"There is a clear sense of weakening against the previous quarter and that of 12 months ago.
"This may be due to the confluence of factors – the first Bank of England base rate rise in a decade; seeming uncertainty in Government as to exactly what Brexit will look like; a cut in consumer spending and official forecasts suggesting GDP growth will be lower for longer.”