Kent economy split between 'thrivers and strugglers' in wake of EU referendum, shows survey

Kent companies are enduring a “polarisation between thrivers and strugglers” according to a study of businesses in the months after the vote to leave the EU.

One in four firms in Kent suffered a decline in UK sales in the third quarter, showed figures from Kent Invicta Chamber of Commerce.

The 25% of companies with falling turnover is three percentage points higher than the previous three months and continues a trend of decreases stretching back to the fourth quarter of 2014.

Firm Ground director Bruce Bell says house buyers are putting off purchases amid Brexit uncertainty
Firm Ground director Bruce Bell says house buyers are putting off purchases amid Brexit uncertainty

The number of companies recording improved domestic revenues also dropped nine points to 32%

Growing numbers of the 109 surveyed by Kent Invicta Chamber of Commerce also reported worsening forward orders in the UK, up six points to 23%. The number expecting orders to improve fell eight points to 27%.

Meanwhile, the county’s exporters did not all enjoy the expected boost from the fall in the value of sterling after the vote to leave the EU.

"People are looking for a bargain. All we are talking about is a slight pause...” - Bruce Bell, house builder Firm Ground

The picture was mixed with the 31% reporting increased sales, up 10 points, offset by 28% recording a decline in foreign revenues, up 16 points.

Overseas orders improved for 26% of firms, up eight points, but they decreased for 29% of businesses in the county, up 17 points.

“Evidently the Brexit uncertainty clobbering sterling isn’t an advantage for all exporters,” said the Kent Invicta Chamber report. “We see some polarisation between thrivers and strugglers.”

Bruce Bell is a director of Firm Ground, a small house builder which has just completed a development in Lynsted, near Sittingbourne.

He has sold four of the eight homes completed this summer but has seen demand slip away for the rest, despite reducing the prices.

Growing numbers of firms reported improved or declining export sales, highlighting the "polarisation" described in the quarterly economic survey
Growing numbers of firms reported improved or declining export sales, highlighting the "polarisation" described in the quarterly economic survey
Export orders improved for more firms in the third quarter of the year
Export orders improved for more firms in the third quarter of the year

He said: “There’s a confidence impact that has resulted in delayed purchasing in certain segments.

"People are looking for a bargain. We are confident in our product so we are not despondent. There’s still a need for quality housing. All we are talking about is a slight pause.”

Despite the gloomy picture for some firms, there is no indication the vote to leave the European Union has drastically affected cashflow.

Although the number saying it had improved fell six points to 24%, the amount saying things had got worse also fell by five points to 21%. Some 35% reported worsening cashflow in the first three months of the year.

Less firms said UK sales improved
Less firms said UK sales improved
More companies reported a decrease in UK orders
More companies reported a decrease in UK orders

Companies do not appear to be addressing their problems by upping prices either, with 72% saying it remained the same.

The pound has fallen in value to about $1.22 and €1.12 but the amount of companies planning to increase tariffs remained static at 27%.

Amy Filippaios runs Simply Hair, in Hersden, which makes real human hair extensions. It imports much of its hair from China in dollars.

“The exchange rate is having an impact on the industry as a whole,” she said. “Our industry is not very business-minded. It is run by girls with a passion for it.

“For the last year we have been hedging our currencies ahead of time. We are hedged four to five months ahead.

"We are probably the only ones doing it, even among our bigger competitors. As soon as the Brexit vote happened, the pound dropped and our competitors had to put their prices up.”

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