Businesses ‘in holding pattern’ according to chamber’s latest economic report

Companies across the West and North Yorkshire region are in a holding pattern awaiting the outcome of Brexit negotiations according to the chamber’s economic report.

Manufacturers reported increasing sales over the last quarter, both home and abroad, outperforming the national average. Some of this has been attributed to companies focusing on UK markets where customers higher up the supply chain are looking for a degree of certainty with regards delivery times and prices.

Service sector businesses continue to record growth in domestic sales although the pace slowed in the last quarter, down slightly from its four year peak last quarter. Employment across the service sector remains strong also with 44% of companies attempting to recruit in the first quarter of 2019.

There are strong indications that manufacturers are stockpiling and building inventory in order to stave off any negative outcomes of a disorderly exit from the European Union. Of course this ties up cash, making companies a little less agile and potentially harming their ability to respond positively to opportunities and threats.

Chamber chair, Gerald Jennings, said: “Despite the positives, we cannot ignore the uncertainty caused by Brexit. Business confidence is now down to levels last seen in 2016. Against a backdrop of slowing global growth and Brexit uncertainties, investment in plant and machinery slowed markedly in the last quarter across the region as companies hold off major purchases until they better understand what trading conditions they face. The underlying economy remains strong but decision making has been paused, at least for the time being.

“Politicians must now do all they can to provide clarity and certainty, putting country ahead of party, in order to give companies the confidence to know that their investment decisions will not be derailed by unexpected consequences surrounding Brexit.”