March 2012 retail sales volumes: up 1.8% on the month, up 3.3% on the year
Commenting on the retail sales figures for March 2012, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“An increase in retail sales in March was expected after the recent temporary fall, but this rise was well above analysts’ predictions. We shouldn’t over analyse one month’s figures, but this news reinforces hopes that GDP will show positive growth in the first quarter, and that the UK avoided a technical recession. Erratic construction and manufacturing figures may mean the ONS announces a negative figure for Q1 next week, but given the positive messages coming from business surveys, it is important to keep this in context.
“While a positive GDP figure will help maintain business confidence, we mustn’t be complacent. Economic growth in the UK is still too weak and businesses must be empowered to drive the recovery – especially at a time when the public sector is shrinking. Reallocating priorities from within the spending envelope of Plan A towards more policies to boost growth should be a key aim for the government.”
In the three months to February 2012, unemployment fell by 35,000 while employment rose by 53,000
The number of unemployed people aged 16-24 fell by 9,000 but remained above 1million
The number of people working part-time because they could not find a full-time job rose by 89,000 to the highest figure since records began
Commenting on the labour market figures published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“With economic pressures facing the UK and ongoing problems in the eurozone, these figures were broadly positive, showing that unemployment fell and employment increased. But there are certain features which are causing concern. Youth unemployment, though slightly down, remains above one million, and the number of people working part-time because they can’t find a full-time job reached a new peak. Although the rise in employment is welcome, we can’t ignore the fact that part-time jobs have risen while the number of full-time jobs has fallen. The overall message from these figures is encouraging, however, as they show the ability and willingness of the private sector to drive recovery at a time when the public sector is likely to shrink further.
“But the challenges facing the labour market cannot be overlooked. As the deficit-cutting plan forces the government to reduce employment, it is likely that the unemployment total will increase over the next year. Every effort must be made to reduce the regulatory burden on businesses and increase the flow of lending to credit worthy firms so the private sector can create new jobs.”
“An increase in QE is unnecessary…the MPC should look to purchase other private sector assets, such as securitised SME loans”
Commenting on the Monetary Policy Committee minutes for April, published today by the Bank of England, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“As expected, the decision by the Monetary Policy Committee to maintain interest rates at 0.5% was unanimous. This month there was a change in the committee’s vote on increasing the Quantitative Easing (QE) programme, with Adam Posen changing his vote in support of an increase to against a further rise. The decision to maintain the current level of QE was taken with a majority of eight members to one, rather than seven to two.
“The minutes acknowledge that the fall in inflation in recent months has been less than the committee originally envisaged. The MPC also raised questions over the accuracy of initial ONS reports of sharp falls in construction that may push the economy into technical recession in Q1.
“In spite of current uncertainties around next week’s GDP figure, and increase in QE is unnecessary, and any impact would be marginal. The MPC’s main priority should be ensuring that the large amount of assets already purchased is put to better use. The recent increase in QE should be used to help increase the flow of lending to businesses. The MPC should also look to purchase other private sector assets, such as securitised SME loans.”
New Chamber member Saxon Air is the fastest growing Private Air Charter company in the UK. Established in April 2007 by founders Christopher Mace and James Palmer having a combined experience of over 20 years in aviation, and with the financial backing of businessman Graeme Kalbraier
Since 2007 the business has gone from strength to strength, as today they own and operate a modern fleet of private jets and VIP helicopters. Early in 2010, they were awarded a 10 year contract as the preferred Handling Agent to supply ground handling services at Norwich International Airport for all non-scheduled business, private and general aviation aircraft.
With continued growth Saxon air built their £7.9m Business Aviation Centre and Hangar facility was completed in May 2011
I hope you will join me in welcoming them at the next Chamber event.
Annual CPI inflation up from 3.4% in February to 3.5% in March
Annual RPI inflation down from 3.7% in February to 3.6% in March
Commenting on the inflation figures for March, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The inflation figures for March were broadly as expected. However, it is disappointing that the steady fall in inflation seen since September 2011 has been reversed this month. We expect inflation to fall over the remainder of the year, but the decline will be less than the Monetary Policy Committee (MPC) has envisaged. This means that the pressures on businesses and consumers will ease, but not as rapidly as first hoped.
“With inflation falling more slowly than expected, we believe that any further increases to the Quantitative Easing (QE) programme are unnecessary. The main priority should be ensuring that the additional liquidity provided by the most recent QE increase is put to better use to improve the flow of lending to credit worthy businesses. The government’s credit easing programme should be made more substantial, but the MPC must also reconsider its reluctance to purchase private sector assets.”
Tidal Transit Limited provides access, transport and crew transfer services to the industries of the North Sea. Operating from the North Norfolk coast we specialise in safe, speedy and efficient travel for those working in the offshore wind energy sector. Our fleet of custom-built, high specification wind farm work boats offer unparalleled stability and are crewed by fully qualified personnel with a thorough local knowledge and maritime experience.
Tidal Transit Limited was incorporated in January 2011 having formerly traded at Norfolk Fishing Trips under the management of Adam Wright of Thornham. Norfolk Fishing Trips had been running since 2005 offering day charter fishing trips from Brancaster Staithe in the summer and Lowestoft in the winter. It evolved into Tidal Transit to make the most of the growing offshore energy sector around the UK and especially wind.
Since January 2011 Tidal Transit Limited has raised over £2m for funding the development of its fleet of new purpose built offshore wind support vessels. We took delivery of Ginny Louise in December 2011 and Eden Rose in April 2012. The Company plans to build a further 8 vessels upon the same design which we aim to be available during the next 2 years.
Adam Wright (Operations Director) and Leo Hambro (Commercial Director), are in the EDP Future 50 for 2012 and Tidal Transit’s vessels were finalists in EEEGR 2012 Innovation Awards.
Ginny Louise is working for SSE on the Greater Gabbard Wind Farm. Eden Rose will arrive in the UK on 18th April and is looking for work Katie Louise returned to Brancaster Staither for the summer season on 2nd April.
The London 2012 Olympics may well be a once in a lifetime opportunity (the last time the Olympics were held in London was 1948) for many of us to experience the Olympics first hand. This has the potential if not handled correctly to cause friction between employees (who wish to attend or volunteer at the Games) and employers (who have businesses to run and staffing levels to maintain.
ACAS have issued some guidance for both employers and employees, which include an informative Q & A section.
The AGE 16 to 24 year olds is aimed at helping eligible employers to offer young people employment through the Apprenticeship programme, by providing wage grants to assist employers in recruiting their first apprentice.
The National Apprenticeship Service will provide up to 40,000 Apprenticeship grants to small medium sized employers recruiting 16 to 24 year olds with a value of £1,500 to encourage new employers to take on new apprentices.
The £1,500 is in addition to the training costs of the Apprenticeship framework which are met in full for young people aged 16 to 18 and 50% for those aged 19 to 24.
Priority will be given to small-medium sized employers with less than 250 employees and we expect to support at least 40,000 of these employers to recruit an apprentice for the first time.
Large employers (more than 250 employees) are not eligible for support through this initiative. But we do want to encourage take up within their small-medium enterprises (SME) supply chain.
It is expected that most employers will want to access AGE 16 to 24 to support the recruitment of one apprentice. However subject to budget availability and the employer’s commitment to support the apprentice to the end of their programme, up to 3 grants can be made to any one employer. However, the employer must commit to the total number of apprentices they wish to take on through the grant at the upfront agreement stage.
To check if you are eligible and to apply for AGE 16 to 24 you can:
Complete the online web enquiry form
Call the National Apprenticeship Service on 08000 150 600
An adviser from the National Apprenticeship Service will contact you to discuss the support available in more detail
Or contact your local Training Provider direct.
Further information View/download our fact sheet and presentation for further information on the Apprenticeship Grant for Employers of 16 to 24 year olds.
Commenting on today’s Monetary Policy Committee (MPC) decision, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“Following the February increase in Quantitative Easing (QE), the decision to keep interest rates and the QE programme on hold was widely expected. With QE still being implemented, and given the MPC’s self-imposed practice of only buying gilts, this was the right decision. However, last month two MPC members voted for an increase in QE to £350bn. While support for this may be strengthening, we believe that adding to QE would be unnecessary.
“We supported past increases in QE because they eased pressures on the banking system and helped to underpin financial stability. However, this has not led to meaningful increases in lending to small businesses, and the benefits to the real economy have been limited. Increasing QE now would only have a marginal effect. There is ample liquidity in the financial system and there is no need to drive down yields on government bonds further.
“The main policy aim must be boosting the unduly low rate of economic growth by increasing lending to viable businesses. To achieve this, it is vital to make the new credit-easing scheme more substantial. But the MPC also has a part to play. The committee should reconsider its reluctance to include assets other than gilts in the QE programme, such as securitised SME loans. This will make the banks less risk averse, and will help to improve the flow of lending to credit-worthy firms.”
Grants of between £25,000 and around £1 million are available to enable “significant game-changing, transformational performance in farm, forestry, tourism, agri-food and micro businesses in rural areas.” Grants will be a maximum of 40% of project costs and must be matched by private funds. Outline applications need to be submitted by 30 April and applications in upland and Rural Growth Network areas will be prioritised.
Commenting ahead of the MPC decision tomorrow (Thursday), David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The financial markets are almost unanimous in expecting no change at the MPC meeting, with interest rates being kept at 0.5% and the Quantitative Easing (QE) programme at £325bn. However, two committee members voted at the last meeting for an increase in QE to £350bn, and we’ll be interested to see whether support for such a move would gather momentum. Although we have supported previous increases in QE, we feel that a further £25bn would be unnecessary as it would only have a marginal effect. There is ample liquidity in the financial system and there is no need to drive down yields on government bonds further.
“The main aim should be supporting real economic growth, by encouraging increased lending to viable businesses and making the new credit easing scheme more substantial. But the MPC should also reconsider its reluctance to include assets other than gilts, such as securitised SME loans, in the QE programme. This will make the banks less risk averse, and will help improve the flow of lending to credit-worthy firms.”
BCC’s Quarterly Economic Survey for Q1 2012 shows encouraging signs of growth, but the pace of recovery is still too slow
Caroline Williams, CEO Norfolk Chamber of Commerce: “Norfolk and the rest of the UK has the potential to recover, but to achieve that the government has to set businesses free to grow”
The British Chambers of Commerce’s new Quarterly Economic Survey (QES) released today (Tuesday) shows encouraging results for Q1 2012, with most balances recording increases on the last quarter. The new survey, comprising almost 8,000 responses from businesses across the UK, shows a welcome improvement on the results of Q4 2011 which pointed towards stagnation.
While the results are more encouraging than the previous quarter, they show that growth in Norfolk and the rest of the UK is still too weak, with the balances still below those seen in 2007 before the recession. Many manufacturing balances are now at a satisfactory level, but the service sector balances are sluggish.
Balances measuring domestic and export activity across firms showed welcome increases, and more businesses are looking to invest in employing more staff, training, and plant and machinery. However, cashflow is still a real problem, and despite concerns about inflation decreasing, recent increases in oil and food prices may alter this over the next few months.
Domestic orders The Norfolk manufacturing sector saw an increase in domestic sales and orders from the last quarter. This is also reflected across the rest of the East of England and at a national level. However Norfolk’s service sector saw a reduction in both sales and orders from the previous quarter. Nationally the service sector showed a small measure of improvement:
Norfolk manufacturing home delivery results went up 20 points to +32%, and home orders rose 13 points to +19%. However in the Norfolk service sector, the home deliveries balance dipped slightly from 18% to 15% and the home orders balance dropped from 9% to 6%
Exports Export sales and orders in both the manufacturing and the service sectors continue to improve with Norfolk, East of England and the national results all showing increases from 2011:
Balances recording exporting activity for Norfolk manufacturers strengthened in Q1 2012 and rose by 16 points to +37% – a level not seen since Q3 2010. The Norfolk service sector, whilst improving its orders, showed a slow down on actual deliveries in the last 3 months
Though stronger than domestic orders, Norfolk exports are still below levels seen in the BCC’s Quarterly Economic Surveys prior to the recession
Employment Figures for the last 3 months continue to show a downwards trend in both the Norfolk service sector and the manufacturing sector. However Norfolk employers are still showing some optimism for improvement in these figures, with both sectors recording increases:
The manufacturing employment balance is stronger at +14%, than the service sector balance, which is still weak at 3%
Firms in both sectors are more optimistic about future recruitment than during Q4 2011. The balance of Norfolk manufacturing firms looking to increase workforces increased by 7 points to +19%, a level not seen since Q3 2011. In the Norfolk service sector, figures surged by 15 points to +25% – a level last seen in Q1 2011
Business confidence & investment Confidence across both sectors improved in the last 3 months. Norfolk businesses are showing optimism in both turnover and their expected profitability for the next quarter. Both sectors are also advising that investments in plant, machinery and training are also increasing:
The balance measuring Norfolk manufacturers’ expectations for increasing turnover and profitably jumped to levels last seen in Q4 2010. Among the service sector, turnover confidence increased to +54% (last seen in Q4 2010), and profitability confidence rose to 50% (back to levels in Q4 2010)
More Norfolk firms are looking to increase investment. Plans by Norfolk manufacturers to invest in plant and machinery increased to +27% (the strongest level since Q4 2010), and intentions to invest in training increased by 10 points to +31%. For the service sector in Norfolk, the results were mixed with the balance measuring investment in plant and machinery dipping by 2 points to +9%, whilst the training balance rose 2 points to +25%
Cashflow Balances measuring cashflow (the movement of cash in an out of a business) remain weak, and are now in negative territory for both the manufacturing and the service sector in Norfolk. Overall both the Norfolk manufacturing sector and the service sectors have advised that they expect to have to increase prices over the next 3 months. This is reflected at a regional and national level as well. Norfolk manufacturers in particular, have advised that price increases were expected due to raw material costs rising:
The manufacturing cashflow balance fell heavily by 25 points, to -22%. The services cashflow balance also dropped by 13 points, to -16%
Both the sectors reported a decrease in their operating capacity, with only 27% of Norfolk manufacturers and 36% of the Norfolk service sector operating at full capacity
Commenting on the results, Caroline Williams, CEO of Norfolk Chamber of Commerce, said: “It is encouraging to see that businesses are feeling more confidence at the start of 2012 than they were at the end of 2012. Norfolk businesses are showing optimism in both turnover and their expected profitability for the next quarter. Both sectors are advising that investments in plant, machinery and training are also expected to increase. However, the Norfolk economy is still facing huge challenges and the recovery is still too slow.
The results of the Quarterly Economic Survey point to a welcome but modest improvement in the Norfolk economic situation. The UK economy will likely avoid a recession, though the erratic construction figures may distort the ONS estimate. On the basis of this survey, the British Chambers of Commerce are now predicting quarterly GDP growth of 0.3% in Q1 2012, in line with the OBR’s recent forecasts. However, growth is likely to remain low for some time, and a return to a more normal pace is unlikely until 2013.
The BCC forecast for 2012 GDP is 0.6%. Their prediction is lower than that of the OBR* for two reasons. Firstly, we are still concerned that the unresolved problems in the eurozone may trigger new upheavals later this year. Secondly, in view of the increases in oil and food prices since January, our current forecast is that the fall in UK inflation over the next 12-18 months will be slower than first expected.
“With domestic demand in Norfolk remaining weak and unemployment likely to increase over the next year, every effort must be made to boost growth and empower the private sector to create jobs. While the government perseveres with efforts to cut the deficit, it must reallocate priorities, within the spending envelope, towards growth enhancing policies. Red tape must be cut more aggressively, the credit easing programme must be made more effective, and the MPC must do more to ensure that the huge QE programme encourages increased lending to viable SMEs.”