Quarterly Economic Survey results for Devon indicate resilience in manufacturing sector

The British Chambers of Commerce Quarterly Economic Survey (QES) results for Q4 2015, released on Thursday 7 January, indicate slower economic growth in the short term.

The QES, Britain’s largest and most authoritative private sector business survey, based on almost 7,500 responses from companies, shows that most key manufacturing and services balances were weaker this quarter, but nationally manufacturing firms faired worse.

In Devon this is not the case, with manufacturers in Devon indicating an increase in UK sales (+17% on Q3), an increase in UK orders (+10% on Q3) and an uplift in those manufacturing firms operating at full capacity (+34% on Q3).

National results indicate that key balances for the services sector dipped slightly again on the previous quarter, with domestic sales continuing to be the main contributor to overall growth. The sector however continues to remain resilient in the face of global headwinds.

Compared to the national results Devon’s economy is performing well, with most indicators showing an increase on the previous quarter.

George Cowcher, Chief Executive of Devon Chamber of Commerce said: “The Quarterly Economic Service is an incredibly useful tool for understanding the economic climate.

"Devon Chamber is pleased to see that businesses in the county are bucking the national trend, showing increases across key balances. It is particularly pleasing to see that Devon’s manufacturers are seeing an increase in sales, with more working at full capacity than Q3 2015.

"With a strong, united Chamber in Devon championing business and working alongside partners to improve business conditions the Chamber hopes to see further positive results next quarter as Devon’s economy achieves growth.”

Devon Chamber of Commerce, as the accredited Chamber for the county as part of the British Chambers of Commerce network will continue to survey businesses in Devon each quarter to contribute to the Quarterly Economic Survey, using data to analyse how the county’s economy is performing.

Key findings in the Q4 2015 Quarterly Economic Survey:

Overall, the national results suggest positive economic growth over the next year, albeit at a slower pace, but built mainly off the back of the services sector. The UK recovery continues to face many global challenges
Most key balances were weaker in Q4 than in Q3 for both the manufacturing and services sectors; the falls in services are in general smaller than the declines in manufacturing. In Devon most key balances were stronger in Q4 than in Q3 indicating positive growth.
Nationally export manufacturing balances declined sharply to levels approaching stagnation – export sales declined nine points to +1%, the lowest level since Q3 2009 – while export orders also fell to +1%. In Devon Export sales showed a +8% increase on Q3 and Export orders increased +14% on Q3.
The services sector export sales balance also fell by three points to +15% - the lowest level since 2011. Devon’s service sector bucked this trend with export sales rising by +1%.
Domestic balances were stronger than export balances, despite falling. Manufacturing sales balance fell seven points to +13%, while domestic orders were down eight points to +10%. In services, domestic sales balance fell four points to +32%, with orders dropping six points to +23%
Intentions to increase prices rose markedly in manufacturing, from +8% in Q3 to +19% in Q4. In services however, this fell slightly to +21%
Both sectors report increased pressures for higher pay settlements
On a positive note, both sectors report increased intentions to invest in plant and machinery. Manufacturing rose six points to +24%, while the balance for services rose three points to +20%