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Survey Reveals Testing Times for Northamptonshire Manufacturing
June 2007
Local manufacturers have been feeling the pinch at home, according to Northamptonshire Chamber’s Quarterly Economic Survey.
Sales from January to March are reported to be lowest in a year. Questioning firms from across the country, the survey showed 28% of manufacturers reported a decrease in UK custom in the first quarter of 2007.
With 73% companies in the sector reporting that they are operating “below full capacity and almost eight out of ten of those wanting to recruit struggling to fill vacancies, it looks like staffing problems could be one factor underlying this weaker performance.
Service sector businesses have shown a stronger performance than their manufacturing counterparts on the home front, with a net balance of 43% companies reporting an increase in domestic sales and bookings.
But perhaps surprisingly, while business confidence for both sectors is high, the net percentage of manufacturers predicting rises in profitability over the next year (65.4%) is higher than the net percentage of services firms (64.4%) foreseeing the same.
Kirstine Storey, policy manager at Northamptonshire Chamber said: “The UK sales figures for local manufacturers are disappointing and reflect a weakening picture for the sector compared to the end of last year. The impact of energy costs, raw materials costs and interest rate rises are clearly beginning to have an impact.”
“Business breathed a sigh of relief when the Bank of England’s Monetary Policy Committee (MPC) held interest rates at the beginning of April, but their relief was short lived as the May MPC meeting authorized another rise.
“The concern is that the cumulative impact of four bank rate increases announced since August 2006 only now beginning to be felt, yet there are still those predicting further rises so that the MPC’s inflation target of 2% is achieved. Coming so soon after the damaging budget increase in the Small Companies’ Rate from 19% to 22%, a further rise in interest rates could pose new and unpredictable threats for companies”
Source: In Business June/July 2007
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