QES Survey points to continued growth in the Swindon area

Tuesday, 6th July 2010

Results of the latest Economic Survey, which included responses from Swindon Chamber of Commerce members, suggest that the UK economy saw further growth in the second quarter of 2010, building on the improvement in the first three months of the year.

Key indicators on business conditions, such as operating at full capacity, investment plans, export sales in the service sectors – made gains in Q2.

Commenting on these figures, Claire Prosser, policy executive for the Thames Valley Chamber of Commerce Group, said: “These results contain some very positive features, indeed notably the improvements in export sales. Sales, advanced orders and export orders remained constant. It highlights how – in the recent months – service companies in the South West are remaining stable.”

“In the service sector, members said employment and future employment expectations were steady. It is encouraging to see that businesses are looking to take on new staff, that they are confident that there is work for them. Indeed, a Work Foundation research report indicated that Swindon was the ninth best UK town for finding a job and would experience considerable growth.”

“From the recent Emergency Budget announcement, our members were clear that VAT was the ‘least worst’ tax rise they could face. While the rise will inevitably affect businesses and consumption, we are pleased that the Government has put off the increase to 4th January 2011. A few days’ delay after New Year gives businesses time to adjust.”

Despite the encouraging results, the Chamber warns that underlying weaknesses in the economy remain, which cannot be ignored if we are to avoid a relapse into recession. The business group highlights sluggish growth in the service sector as a serious concern.

Key concerns for the service sector were exchange rates and competition.

Claire continued:

“With very austere times ahead, no one should think that the UK’s economic recovery is totally secure. There will need to be an unwavering focus on ensuring business is able to deliver growth, create jobs, and drive a lasting recovery. Interest rates will have to stay low for longer, burdensome new employment red tape must be blocked, and we will have to generate growth across all regions of the country.”

“As the Government has now embarked on the vital task of curbing the UK’s unsustainable budget deficit, it is essential to create the right business conditions that will enable wealth creating companies to drive a lasting recovery – with a rebalanced economy focused on investment and exports at its heart. The Chamber wishes to thank members who have taken the time to complete the survey.”

The economic data, collected across every region of the country, is released just two days ahead of the Monetary Policy Committee’s July interest rate decision.

The highlights from the Q2 QES include:

• The service sector’s domestic sales rose 6 points, to +12%.

• The service sector’s export balances recorded modest increases and they remain weak by historical standards.

• Employment in services edged up by just 1 point, to +4%, while employment expectations rose 3 points, to +11%.

• The service sector’s confidence measures weakened – a disappointing setback at this early stage of the recovery.

• Services cash flow improved 6 points, but remains negative at -3%.

Note to editors:

These results come from the recent Quarterly Economic Survey (QES) South West for Q2 2010 (April, May and June).

Press enquiries please contact
ginettegower@thamesvalleychamber.co.uk