Lincolnshire economy flatlining, businesses optimistic

Lincolnshire’s economy has been described as in a “steady state” in the past quarter, though county businesses are optimistic their profitability, turnover and market share will rise in 2013.

The latest results from the Quarterly Economic Survey (QES) by the Lincolnshire Chamber of Commerce, Lincolnshire Research Observatory and University of Lincoln, indicate current trading conditions remain challenging.

The percentage of respondents reporting improved sales in UK markets rose slightly, but for most sales and order volumes have remained the same as last quarter.

Fewer respondents reported improved exports compared to last quarter, particularly from the manufacturing sector, though there was an increase year-on-year.

Professor David Rae, from the Lincoln Business School, said: “It is a picture of relatively steady state.

“I would say that these [QES] figures are generally showing Lincolnshire to be at least as healthy as the recent national reports for the UK economy and in some respects more so, such as the relative strength in orders and business.”

Lincolnshire out-performing UK economy

Simon Beardsley, Chief Executive of the Lincolnshire Chamber of Commerce, said: “It’s still a challenging economy, but the QES figures show a marked increase in businesses confidence with more businesses reporting they expect growth in their profitability, turnover and market share over the next 12 months.

“And local businesses have a right to be optimistic. The figures from the Office for National Statistics show that the Lincolnshire economy has been out-performing the national economy by a notable margin.

“Gross Value Added, which measure economic productivity, rose in 2010 and 2011 by 4.5% and 3.5% respectively. This is 1% higher than the UK average. And business demography figures show that the number of active and new businesses in Lincolnshire is up, and the number of businesses ceasing trading is down. The survival rate of businesses in the county is also higher than the regional and national average.

“We work on the QES survey with The Lincolnshire Research Observatory, which believes that the comparative strength of the local economy may be in part due to the type of businesses in the county. There is a higher percentage of established firms in Lincolnshire, which indicates an experienced and resilient local economy that may be coping better with the difficult economic condition.”

Barriers to business

Phil Scrafton, one of three directors at Globe Consultants Limited, planning and economic development specialists based in Lincoln, said: “All businesses are affected by late payments from customers, which can seriously affect cash flow.

“Whilst the banks appear to appreciate this, they do not act accordingly by providing more flexibility to support local businesses. This seems to be a common problem shared between businesses of all sizes, and results in sound and good quality businesses going under. On the odd occasion that we have had cash flow a challenge, our bank has given us short shrift and I would have to say that has challenged our long-term relationship with our banks.”

The Quarterly Economic Survey is the largest and most representative independent business survey of its kind in Lincolnshire. The survey measures domestic and overseas sales and orders, employment prospects, investments, recruitment, cash flow confidence and price pressures. Lincolnshire businesses can take part in the survey for 2013 by filling out this online survey.