Business confidence 'deteriorated', say Greater Manchester Commerce

Business confidence has deteriorated, reflecting the worsening economic situation according to the latest Quarterly Economic Survey from Greater Manchester Chamber.

The decline in confidence is beginning to affect the workforce with almost a quarter of manufacturing businesses reporting an expected reduction in staff over the next three months. Service businesses also expect redundancies.

Over a third more manufacturers than previous quarters are expecting major decreases in turnover and profitability over the next 12 months. Following a number of quarters of comparatively better performance than service providers, manufacturers are now experiencing the full brunt of the downturn.

Holly Keogh, the Chamber's Assistant Policy Manager said: "One of the most noticeable falls reported in our quarterly economic survey is the decline in confidence. Economic conditions are poor at present, however this is no surprise. Manufacturers and services are being hit hard as we begin the new year and the trend looks set to continue for the coming months. However, it has been noted that inflationary pressure has eased and become much less of a concern for our members which is encouraging."

Exporters are also beginning to feel the impact; although still performing comparatively better than average, exporting manufacturers have shown a 22% decrease in sales and a 15% decrease in orders on last quarter. For services the picture is much the same. After a brief rebound last quarter, orders and sales have continued to fall.

Inflation has dropped markedly as an area of concern for both manufacturers and service providers. The chief area of concern for manufacturers is exchange rates, cited by 62% of the survey's respondents, whilst services are most worried about competition.