Customer demand an increasing concern for North West businesses

Justin Kyriakou

Businesses in the North West of England are increasingly concerned about customer demand after domestic sales and exports contracted more sharply than the national average, a new report from chartered accountancy body ICAEW has revealed.

The ICAEW Business Confidence Monitor, published today (November 18), found that more than half of firms in the region cited customer demand as a growing source of difficulty, the second highest proportion in the UK.

Both domestic sales and exports were down from a year ago, with contractions here larger than those during the global financial crisis. Profits were also significantly below the level they were a year ago.

Against a backdrop of domestic and international lockdowns affecting company activity, a quarter of firms said that transport problems and late payments were also growing challenges.

Businesses in the North West predicted a modest improvement in sales performance over the next 12 months, but further coronavirus restrictions, most notably the second lockdown in England, would likely hinder recovery, ICAEW said.

Overall, business confidence in the region was in negative territory, with Brexit uncertainty likely to have contributed to the weakness in sentiment.

Justin Kyriakou, ICAEW regional director for the North West, said: “The impact of coronavirus restrictions, both at home and abroad, is clearly having an adverse effect on business confidence in the North West.

“Businesses will also be nervous about the outcome of UK-EU trade negotiations, particularly given that the EU market accounts for a large proportion of total exports from the region.

“We urge the Government to double-down on its efforts to secure a fair trade deal which will help stimulate and sustain the UK’s post-COVID economic recovery.”

Nationally the BCM findings showed that the proportion of companies struggling from a lack of demand had increased from more than a third in quarter four 2019 to in excess of half this quarter.

Late payments were a rising concern for a third of businesses, indicating financial distress in the market.

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