Skills shortage and weak trade hits Norfolk manufacturing sales

Manufacturing sales have dipped, according to Norfolk Chamber of Commerce. Photo: Steve Adams

Manufacturing sales have dipped, according to Norfolk Chamber of Commerce. Photo: Steve Adams

Difficulties attracting skilled staff to Norfolk combined with weaker trade figures have provoked a dip in business confidence among the county's manufacturing firms, says the latest British Chambers of Commerce quarterly economic survey.

More than 7,000 firms across the country take part is the survey each quarter, helping to build a detailed picture of what is happening to businesses in the UK and regionally.

Nationally, weak trade and manufacturing figures in the last quarter of 2015 has prompted the British Chambers of Commerce (BCC) to downgrade its UK GDP growth forecasts until 2017.

Weaker-than-expected net trade and manufacturing figures were the main reasons for the business group's downgrading decision from 2.6pc to 2.4pc in 2015, from 2.7pc to 2.5pc in 2016, and from 2.7pc to 2.5pc in 2017.

However, the BCC believes the UK economy is set to continue expanding at a moderate pace, mostly driven by strong growth in the service sector and in consumer spending, while unemployment is also predicted to keep falling.

In Norfolk manufacturers reported a fall in sales and export orders and there was a drop in confidence over future profitability. More manufacturers also noted difficulties in recruiting at the end of last year.

By contrast there was more confidence in the services sector although recruitment had slowed down during the three-month survey period, however there was an increase in the number of firms looking to take on staff over the next three months.

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Jonathan Cage, president of Norfolk Chamber, and managing director of Consulting, feels the struggle to recruit people from outside Norfolk could fuel wage rises.

'The regional figures showed a dip in outturn but there is a quiet confidence in Norfolk,' he said. 'There are some exciting manufacturing businesses here, and they are probably more confident in 2016.

'I can see pay going up quite considerably in this region. Norwich has got to have a joinedup message to bring people here.'

Jeanette Wheeler, partner at Norfolk law firm Birketts, and a member of the chamber board, said: 'Some sectors will have a harder time than others, it's not going to be plain sailing. If you work in professional services, you are going to really struggle to find skilled people, but on the other hand they are actively recruiting.'

She said that cuts in public spending could also start to have an impact on employment locally particularly among the health service, police and housing associations.

John Longworth, director-general of the British Chambers of Commerce, said the UK still needs to see a fundamental shift in its economic model.

'Official data is starting to reflect what our quarterly economic survey has been showing all year – that our persistently weak trade performance and current account balance are impacting our overall growth,' he said. 'We cannot rely so heavily on consumer spending to fuel our economy, especially when driven by increased borrowing.'

Watch Mustard TV's Business Extra during tonight's news bulletins to see Jonathan Cage and Jeanette Wheeler discuss what the QES findings mean for businesses.