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Monday, 6 July 2009

Quarterly Economic Survey shows business confidence improving

by Ilona Krohn, Principal Economic Adviser

Greater Manchester Chamber's Quarterly Economic Survey is showing that business confidence has improved greatly.

Manufacturing
Overseas orders have improved for manufacturers and they have seen significant improvements in cash flow. However, indicators generally for manufacturing are much lower than this time last year with only 16% of companies reporting that they are working at full capacity compared with 33% this time last year.

Services
The figures for services were markedly better than manufacturing with 25% reporting that they are working at full capacity compared with 35% this time last year. The service sector reported slightly better than average results overall.

So our survey seems to reflect the fact that confidence is starting to return after all the doom and gloom earlier this year. We view this with caution however.

Feeling positive about the future is a vital first step for recovery, but the deep-seated loss of faith in the system as well as the underlying systemic problems remain and this might be only wishful thinking. Further bad news could easily collapse this timid recovery, which would lead to a much slower recuperation.

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