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Thursday, 9 April 2009

Is there light at the end of the tunnel?

by Ilona Krohn, Principal Economic Adviser

Despite a continuing negative trend in all other indicators, our Quarterly Economic Survey found the gap between those who said confidence was low and those who felt more positive has narrowed. Of course it is far too early to say that confidence is on the up but it may be that it has reached its lowest point and is starting to bottom out. Hopefully this is not just the effect of spring arriving and we will start to see a steady rise in confidence over the coming months. It is the first and vital step to recovery.

The survey also revealed that turnover has fallen for both manufacturers and services, and 78% of all companies reported that they were working at less than full capacity.

The fall in the value of the pound has not given the predicted boost to exporters either, with 67% of manufacturers reporting exchange rates as a major concern. It very much depends on individual circumstances how exchange rates affect manufacturers. If they have to import parts and raw materials then their costs will have risen.

Despite gloomy unemployment figures, the survey found the number of small to medium employers making redundancies was relatively low. Results show that it was the larger companies that are tending to shed jobs rather than small businesses.

There was less concern about inflation than in previous surveys, with the main concerns being exchange and business rates as well as competition. The full results will be available for you to look over shortly - you'll find a link here when they're up on the Chamber website.

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