The West Wales Quarterly Economic Survey September - December 2008
Each quarter the Chamber asks businesses in West Wales to contribute to the British Chambers of Commerce Economic Survey. The overall main messages from the 201 companies who responded are:
Business Optimism has worsened in the last three months
o UK Sales have decreased for 40% of businesses, compared to 36% in Q3. This is particularly pronounced in Carmarthenshire.
o 49% of businesses report worsening cash flow in the last quarter.
o A higher proportion of companies expect turnover (49%, last quarter 32%) and profitability (55% last quarter 34%) to decrease next quarter.
Capacity
o 66% of businesses are operating below full capacity compared to 61% in Q3.
Recruitment
o In quarter 3 13% of businesses expected to see their workforce decrease in Quarter 4. The actual percentage whose workforce decreased in Quarter 4 was 25%, with a further 25% expecting a decrease in Quarter 1 2009.
o The most difficult jobs to recruit were, as last quarter, skilled/technical, with the gap to the second rated professional/managerial increasing.
Business Concerns
o Inflation, Taxation and Competition are now nearly equally seen as the biggest business concerns.
The Quarterly Economic Survey is sponsored by Carmarthenshire County Council; The City and County of Swansea; Neath Port Talbot County Borough Council and the Welsh Assembly Government.
Nationally, the Q4 2008 results are distressing and ominous. All the critical national balances have worsened for both manufacturing and services and all are in negative territory.
Manufacturing Sector - Wales
The only positive note to take from the manufacturing sector is that confidence in profitability has increased slightly, although this still remains negative. Export deliveries and orders experienced the same sharp fall as the service sector. Home deliveries and orders also declined, although at a slower rate than the national average.
o 29% reported an increase in home orders down 5 points from the previous quarter and 19 points below the national aggregate.
o 6% reported an increase in export sales, down 27 points from the previous quarter and 6 points above the national aggregate.
o 39% revised their plans for investment in plant and machinery upwards since last quarter, down 18 points from the previous quarter and 17 points below the national aggregate.
o 26% are confident of improving turnover over the next 12 months, down 25 points from the previous quarter and 6 points below the national aggregate.
Service Sector - Wales
The export markets in the service sector experienced a sharp fall, going from positive to negative growth. Investment in plant and machinery has also fallen as has confidence and cash flow. Expectations of job growth are strongly negative, in line with the national average. However, employment expectations for small firms remained in positive territory, although this had decreased from Q3.
o 2% reported an increased in home sales, down 12 points from the previous quarter and 29 points above the national aggregate.
o 25% reported an increase in export orders, down 35 points from the previous quarter and 12 points above the national aggregate.
o 11% expanded their workforce in the last three months, down 21 points from the previous quarter and 11 points above the national aggregate.
o 46% are confident of improving profitability over the next 12 months, down 21 points from the previous quarter and 12 points below the national aggregate.