The impact of COVID-19 restrictions on the county’s businesses has been highlighted in the latest Quarterly Economic Survey. A varied picture has emerged with manufacturing showing clear signs of recovery while the service sector are continues to struggle.
Conducted by the three Chambers of Commerce in Lancashire, the survey shows how businesses performed in the fourth quarter of 2020 compared to the previous quarter. Looking at everything from sales to recruitment needs and business confidence, the survey is a key indicator of the health of local business.
Manufacturing
Following a significant decline earlier in the year following the first lockdown, the manufacturing sector has seen two quarters of recovery across all metrics. Sales have grown in both the UK and abroad, with orders for the next three months also increasing. Although those declaring an increase in employment numbers reduced slightly over the last quarter, expectations of an increase in numbers grew.
Looking to the year ahead, the numbers of manufacturing expecting a better year in terms of turnover of profitability increased.
Service
The difference in performance and confidence between manufacturing and the service sector is stark. As with manufacturing, the service sector suffered a serious downturn at the time of the first lockdown. Despite not showing growth, the numbers reporting decline reduced in the third quarter. These tentative signs of recovery reversed in the face of tier 3 restrictions and the second lockdown being introduced across the county.
Indicators across all metrics show a negative trend for the sector. Confidence is low with more firms believing that 2021 will see turnover and profitability reduce than think it will improve.
Geoff Mason, Policy Manager at the North & Western Lancashire Chamber of Commerce said, “Given the difficult 2020 suffered by the service sector, it is deeply worrying that there is a feeling that 2021 may be worse. It is an indication that many see no path to getting out of the current cycle of restrictions. Continued support is essential for those businesses affected but people need to see a way out of the situation. Improvements to the track and trace system, mass rapid testing and the swift roll out of vaccinations are key to providing a roadmap to re-opening the economy.
“We see that businesses who have been able to remain open have been able to adapt and recover. The optimistic outlook of the manufacturing sector is a result of businesses being allowed to operate. They have had to work out how to comply with new working practices and markets. Given the opportunity to do so manufacturers have shown themselves to be extremely flexible and resilient.”
About the QES
The Lancashire Quarterly Economic Survey is carried out by the three Chambers of Commerce based in Lancashire – North & Western Lancashire, East Lancashire, and Lancaster.
Read the full report giving full breakdown of the results – click here.
Along with Chambers across the UK responses are fed to the British Chambers of Commerce resulting in the UK’s largest business survey. Policy makers in the Treasury and Bank of England use the QES when deciding on monetary and business support policies.
If you would like to be contacted to be made aware of when the next survey is available to complete let us know by emailing geoffm@lancschamber.co.uk.
