Brexit: Growth was 'softening' before EU referendum says British Chambers of Commerce

Sales in a variety of industries remained stagnant or grew at marginal amounts shortly before the EU referendum, according to a survey of bosses.

There were low levels of growth for the services and manufacturing sectors in the second quarter of the year, said findings by the British Chambers of Commerce.

Its Quarterly Economic Survey found the number of firms in Kent recording improved sales grew by three points to 41%.

Growth in the manufacturing sector was low in the second quarter of the year, according to the British Chambers of Commerce
Growth in the manufacturing sector was low in the second quarter of the year, according to the British Chambers of Commerce

However, the amount saying turnover had decreased also grew by two points to 22%.

Orders improved slightly, with those saying they were increasing up three points to 35% and those saying they had declined down four points to 17% on the previous quarter.

Export sales were stagnant in the county, with companies enjoying growth remaining at 21% and 68% recording constant levels, up 15 points.

Meanwhile, growth in overseas orders halted, with 71% saying levels remained constant, compared to 51% three months earlier. Only 12% said the situation had worsened compared to 31% in the first quarter of 2016.

The latest survey covers the second quarter of 2016
The latest survey covers the second quarter of 2016

However, responses to the survey itself in Kent were down 30% compared to the previous two quarters’ average.

Jo James, chief executive of Kent Invicta Chamber of Commerce, which compiled the county’s results, said: “It is too early to talk about the impact of the referendum as we only have anecdotal evidence.

“Conduced just prior to the referendum, responses were significantly down, which just goes to show that businesses didn’t feel certainly enough about the future to complete.

“Those that did respond were obviously those that felt confident therefore the results from the survey are fairly upbeat for the county.”

Flags in front of the EU Commission building in Brussels
Flags in front of the EU Commission building in Brussels

Nationally, the balance of firms in the manufacturing sector reporting improved overseas trade rose slightly to 9% from 8% in the first three months of the year, although fewer firms reported an increase in advance orders.

“Conduced just prior to the referendum, responses were significantly down, which just goes to show that businesses didn’t feel certainly enough about the future to complete..." - Jo James, Kent Invicta Chamber of Commerce

Ahead of the referendum, fewer services companies reported an increase in export sales and orders at 11% and 13% respectively, down from 13% and 16%.

Dr Adam Marshall, acting director general of the British Chambers of Commerce, which had 8,200 responses to the survey, said: “Even before the EU referendum, both business confidence and economic growth were softening in many parts of the UK.

“Our latest survey results, captured just before the vote, suggest that many businesses have been operating in something of a holding pattern for some time.

“Business confidence would be buoyed by strong and clear leadership, both on the timeline for EU negotiations and on the big decisions unrelated to our future relationship with the EU.”

The full results for the county of the Quarterly Economic Survey will be published in the August edition of Kent Business.

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