2015 was an exhilarating year for business, with our Quarterly Economic Survey revealing that over half of all survey respondents said they expected to see improvements in their sales, profitability and turnover.
Over the summer this positive trend continued with more businesses looking to recruit staff thanks to raising domestic demand. This local trend echoed the national picture with service sales enjoying sustained year-on-year growth, as the volume of retail sales in August increased by 3.7% compared with July.
This was the 29th consecutive month of year-on-year growth. However, in comparison to the domestic market, October’s results showed that overseas sales and orders had fallen for the first time since 2009, which is a result no one forecasted a year ago.
As the Chamber, everything we have done this year has one aim, to help businesses across Lincolnshire prosper and grow. As a not for profit organisation, every penny that we earn is spent on helping our members.
On the ground we continued to bring an action packed programme of activity. There is truly too much to mention about all our undertakings, but one of the highlights for me is our involvement in the Greater Lincolnshire Capital Growth Fund.
The grants rang between £10,000 and £250,000, and so far we have awarded over £700,000 to Lincolnshire businesses who have demonstrated sound business growth and investment potential, which will result in new jobs being created.
Since it launched in October 2014 we’ve answered over 200 enquiries and met with 46 SMEs on a one-to-one basis to discuss their needs. Thanks to the money already awarded, 149 jobs will be created, with another three being safeguarded. We’re on track to meet, if not exceed our targets, which will have a significant impact on the county.
Thanks to our Quarterly Economic Survey (QES), we know that many Lincolnshire firms, especially those in the domestic market, will start 2016 in a better place than this time last year.
Using 2015 as a benchmark, we’ll continue to see confidence grow among the business community. In September 2015, 55% of businesses were expecting their profitability to increase over the next 12 months, while 60% expected their turnover to increase too.
Since the recession hit, another barrier to growth has always been cash flow, but more businesses are reporting improved cash flow, with 37% saying it continued to improve (September 2015).
However, the path to recovery has not been a smooth one, and there are many challenges on the horizon. But with careful planning we can identify pressure points, and try to offer solutions. There is no doubt that budget cuts in the public sector will once again hit the business community hard, taking much needed funding away from the coalface.
Media reports speculate that councils across England have already had their government funding slashed by up to 40% since 2010, with more to come next year. However projects like the Capital Growth Fund will go some way to bridge the gap. And among many things, George Osborne’s July budget announced a new National Living Wage of £7.20 by April 2016, rising to £9 by 2020, which could hit any business employing minimum wage staff, and those slightly above, very hard.
As well as all this, international trade is likely to remain challenging in early 2016. The weakness of the euro against the pound has made it harder for UK businesses to compete.
As we see out 2015, more volatility around rates can’t help business planning into 2016 either and this lack of certainty is likely to continue as we progress into 2016. This could put off many new businesses that have the potential to expand into overseas markets.
But through our programme of International Trade workshops, documentation seminars, currency partners and activity with UKTI we’re helping businesses understand the long-term rewards of international growth, rather than the short-term challenges many have seen in news reports.
Next year will also be a fork in the road on a lot of issues including the EU referendum and devolution. As levels of debate surround staying or leaving the EU increase in 2016, business confidence has the possibility to be undermined by the instability of Britain’s position.
In terms of devolution, I am interested to see the impact that it could have on Lincolnshire. We have heard how businesses broadly support the devolution of powers to local areas in England. If done properly, it can drive greater efficiency, accountability, and better results.
I believe that decisions on local growth are best taken when businesses and councils decide what arrangements work best for their areas. Future devolution plans must have maximum accountability to local business and I therefore look forward to leaning more about the details.
Simon Beardsley is Chief Executive of the Lincolnshire Chamber of Commerce, one of the largest business networks in the county providing first-class business support to companies of all shapes and sizes in a range of industries and sectors.