- Pace of growth continues to slow in Q4 2011
- Confidence levels also drop
- UK sales fall, although export sales up
- "State of Economy" drops back to post-recession levels
The pace of local economic growth slowed again and business confidence declined in the last three months of 2011, according to the results of the region's biggest business survey*.
The Derbyshire and Nottinghamshire Chamber of Commerce's latest Quarterly Economic Survey shows that there was again only a small amount of growth in the area's economy during the final quarter of the year.
Businesses reported less positive sales in the UK market, although the decline was far more significant in Derbyshire than it was in Nottinghamshire, with Derbyshire firms reporting a net 17% reduction compared to a net 2% reduction in Nottinghamshire.
However, export sales in Nottinghamshire were stronger, with firms reporting a net 17% increase in international sales as the markets recovered from the Arab Spring and Japanese Earthquake and Tsunami, compared to a slight drop in Derbyshire.
That said, 42% of companies are still reporting increasing sales or orders in either market.
The number of businesses which recruited during the quarter dropped slightly and although there was overall jobs growth, the rate of this growth is reducing. Analysis of the figures shows that although 41% of firms attempted to recruit during Q4, businesses which are reducing their workforce are shedding an average of 5.6 workers, compared to expanding firms, which are increasing their workforce by an average of 4.4 workers.
Taking all the business confidence and performance indicators as whole, the current State of the Economy** has dropped back to levels last seen in late 2009/early 2010, when the UK was emerging from recession.
And looking ahead, local firms are reporting a significant slowdown in UK orders, along with reduced levels of confidence in both future profits and turnover and increased price pressures.
George Cowcher, Chief Executive of the Derbyshire and Nottinghamshire Chamber of Commerce, said: "The results of the Q4 survey are once again disappointing and point to a continuing downward trend in business confidence levels.
"Whilst the Chancellor is right not to compromise on his plan to reduce the UK's structural deficit***, more could be done to mitigate the impacts of the punishing 5.6% rise in business rates due in April 2012, whilst better-focused National Insurance Contribution incentives would help businesses - in particular SMEs - to grow and take on more employees.
"We're still awaiting evidence to see if measures announced in the Autumn Statement to reduce unnecessary red tape, ease the flow of credit to viable businesses and facilitate investment in infrastructure and skills has made a difference. Government now needs to ensure that these measures are implemented swiftly and effectively."
* A summary of the key findings from the Chamber's Quarterly Economic Survey for Q4 of 2011 can be viewed by clicking here.
** The State of the Economy Index is calculated by adding together the net variances of a number of economic performance indicators for each individual quarter - methodology and full data table can be found in the summary here.
*** 65% of Chamber members believe that the Government should stick to its deficit reduction plan - click here for the full story.