Chamber News

Commenting on the publication of the government’s Immigration White Paper, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“While these proposals are not quite as bad as we had originally feared, it’s no secret that companies across the UK are sceptical about whether the government’s approach will actually deliver on their practical, real-world concerns.

“From Cornwall to Inverness, from Northern Ireland to Norfolk, employers are hugely concerned that the complexity and cost associated with new immigration rules will impact their ability to invest and grow at a time when many areas are facing near-full employment.

“The government is giving with one hand, and taking away with the other. More flexibility on skill levels is positive, but this is offset by the wider application of immigration charges to both employers and applicants alike.

“The consultation ahead must result in a system that delivers on business needs in all regions and nations of the UK. Ministers have one last chance not just to listen, but to genuinely hear and act on the concerns that businesses have about their proposals. The arbitrary salary threshold must come down to reflect real-world conditions in different parts of the UK, and the government must ensure that the proposed temporary worker scheme actually functions both for companies and potential recruits.

“In the face of major change over the years ahead, the immigration system must not leave UK businesses with their hands tied – or the government will cause active damage to jobs, communities, investment and the economy.”

Uncertainty over the UK’s future relationship with the EU is one of many factors that has weakened the outlook for business investment, according to the latest forecast by British Chambers of Commerce (BCC).

The UK’s leading business group forecast a decline of -0.6% for business investment this year following weaker than expected data. This is a sharp decline from the 1.0% growth previously forecast. The BCC also expects business investment to grow by just 0.1% in 2019, down from 1.2% growth in its previous forecast.

These worrying figures coincide with the repeated delays on agreeing the Withdrawal Agreement and Political Declaration on the terms of the UK’s exit from the EU and future trading arrangements. With firms looking on with utter dismay at the ongoing saga in Westminster, many have hit pause on major investment plans, including plant, machinery and premises.

The BCC’s forecast assumes that the UK will reach an agreement in negotiations with the EU, and avoid a cliff edge in the short term. Longer-term prospects are still uncertain, but this forecast assumes that a trade deal is reached, at least at outline level. Other scenarios would lead to revisions in the next forecast.

The BCC has marginally upgraded its GDP growth forecast for 2018 to 1.2% (from 1.1%), due to a stronger than expected Q3 outturn as growth received a short-term boost from a number of temporary factors, including the World Cup and the warm weather. However, UK GDP growth is expected to slow to just 0.1% in the final quarter of 2018. The BCC’s forecast for 2019 GDP growth remains at 1.3% but has downgraded its 2020 GDP forecast to 1.5% (from 1.6%). Our latest forecast suggests that UK remains on track to record its second weakest decade of average annual GDP growth on record.

In addition to weaker business investment, the slide in the value of the pound together with weaker confidence levels is expected stifle the contribution of net trade and consumer spending to UK GDP growth. Inflation is now expected to be higher over the forecast period as the weakness in sterling pushes up the cost of imports.

If realised, the leading business organisation’s latest forecast shows an economy on pause. With just over 100 days to go until the UK leaves the EU, firms are still in the dark as to what trading conditions they face, and many businesses are holding back on investment and hiring. The BCC urges Westminster to come together to provide clarity on the UK’s future relationship with the EU, and crucially avoid a messy and disorderly Brexit that the country is simply not prepared for.

Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:

“The subdued growth outlook for the UK economy reflects our view that the weakness in sterling is likely to persist for some time and together with Brexit uncertainty is likely to drag on key drivers of UK economic growth – notably business investment, consumer spending, and trade.

“The contribution of business investment to UK GDP growth is expected to be more downbeat than we previously projected as the increased uncertainty over Brexit weakens business confidence and stifles investment activity.

“Consumer spending is expected to be more limited as the weaker pound drives higher imported inflation over the near term, stifling real wage growth. A weakening currency is also expected to hinder, rather than help the UK’s net trade position by increasing imported input costs while a slowing global economy will limit export demand.

“The downside risks to the UK’s economic outlook remain uncomfortably high. A disorderly departure from the EU would likely deliver a significant negative shock to the UK economy, materially weakening the UK’s near-term growth and productive potential. On the upside, greater clarity and precision over the UK’s future relationship with the EU and with other key markets should help drive an upturn in economic conditions, including stronger investment intentions.”

Key findings in the forecast:

• UK GDP growth forecast for 2018 is marginally upgraded from 1.1% to 1.2%. UK GDP growth is expected to slow to 0.1% in Q4 2018 (down from 0.6% in the previous quarter). 2019 GDP forecast stays at 1.3%, while 2020 is slightly downgraded, from 1.6% to 1.5%
• Business investment is expected to contract in 2018 by 0.6% (down from 1.0% growth in previous forecast), before growing by just 0.1% in 2019, and 1.2% in 2020
• Household consumption is now forecast to grow at 1.5% in 2018, 1.2% in 2019 and 1.5% in 2020, compared to 1% in 2018, 1.3% in 2019, and 1.7% in 2020 in the previous forecast.
• Average earnings growth will outstrip inflation over the forecast period, but by less than in our previous forecast, with growth of 2.6%, 2.7%, and 2.9%, compared with CPI inflation of 2.5%, 2.4%, and 2.2%

• BCC forecasts export growth of 1.4% in 2018, 2.3% in 2019, and 2.2% in 2020, down 1.7%, 2.7% and 2.9% respectively in our previous forecast

• We anticipate interest rates rising to 1.25% by the end of the forecast period, with rate rises expected in Q4 2019 and Q4 2020

Commenting on the forecast, Dr Adam Marshall, BCC Director General, added:

“While Brexit isn’t the only factor affecting businesses and trade, it is hugely important – and the lack of certainty over the UK’s future relationship with the EU has led to many firms hitting the pause button on their growth plans.

“With just over 100 days to go until the UK leaves the EU and no clear road ahead, businesses are having to take action, delaying or pulling hiring and investment plans and, in some cases, moving operations elsewhere in order to maintain hard-won supply chains. A no-deal Brexit would cause significant harm to businesses and communities all across the UK. It is imperative that government and Parliament strain every sinew to avoid a cliff-edge in March.

“As we enter a new year, the government must also demonstrate that it is not paralysed by Brexit – and that it is ready to act to turbo-charge business confidence and investment.

“The Immigration White Paper will be a clear bellwether for whether the government is listening to business – and prepared to give firms clarity and precision on one of the practical, real-world questions they need answered in order to invest and grow.”

We will be closed from 4 pm on Friday 21 December 2018 and will open again Wednesday 2nd January 2019.

A Merry Christmas and Happy New Year to all our members and we’ll see you in 2019.

Thank you to all our members for making 2018 such a positive and exciting year for us! There have been so many great things going on this year, and so many businesses involved in making the Chamber experience enriched, interesting and fun of course. Below are a few of our chamber highlights;

Norfolk Show

Commenting on the confidence vote in the Prime Minister, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“With news that the Prime Minister remains in place, business communities will hope that these political games can finally be put to bed. Westminster must now focus all its energy on urgently giving businesses clarity on the future and avoiding a messy or disorderly Brexit.

“We are just over 100 days to go until the UK leaves the EU, and firms are still in the dark as to what trading conditions they will face. Neither the country nor businesses are prepared for a no deal Brexit, so parliamentarians on all sides must redouble efforts to ensure communities don’t face that scenario by default.

“Many businesses are holding back on investment and hiring, with some enacting contingency plans, for example by moving operations to continental Europe, to give themselves more certainty. It is time for Westminster to urgently come together to provide clarity on the UK’s future relationship with the EU so that firms have the answers they need. There is no time to waste.”

Commenting on the news that the Prime Minister will face a vote of no confidence, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“At one of the most pivotal moments for the UK economy in decades, it is unacceptable that Westminster politicians have chosen to focus on themselves, rather than on the needs of the country. 

“The utter dismay amongst businesses watching events in Westminster cannot be exaggerated. Our firms are worried, investors around the world are baffled and disappointed, and markets are showing serious strain as this political saga goes on and on. 

“History will not be kind to those who prioritise political advantage over people’s livelihoods. Businesses need politicians, regardless of party or views on Brexit, to understand that their high-stakes gambles have real-world consequences of the highest order.”

The University Technical College Norwich (UTCN) is holding a Year 13, CV and Interview Day on Wednesday 30 January 2019 to provide their students with the opportunity to receive actual business feedback to enable them to tweak their CVs and to have ‘real’ experience of an interview in a safe environment.

Sharn Crane, Employer Engagement Co-ordinator said:

“The feedback from last year’s event was incredible and made such a difference to student confidence in interviews and resultant job offers. Volunteers do not need to be experts – the information and interview sheets will be here, so no preparation required.”

All volunteer employers who attend will receive a short briefing before the sessions.  The CV Support Session will run from 10.15am – 12.30pm and the Mock Interviews from 12.45pm – 3pm.

If you are unable to help on 09 January, UTCN also have lots of additional opportunities for curriculum support, assemblies, sponsorship (e.g Dynamo Racing attached), and work experience – either 2 weeks in July or day release Wednesdays/Fridays.

If you are able to volunteer, please contact: hello@noroflkchamber.co.uk and quote UTCN Business Support in your email subject box.

Commenting on the labour market figures for December 2018, published today by the ONS, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:

“While the latest data confirms that the UK jobs market remains in good shape, the second successive rise in unemployment, coupled with a decline in the number of people who are not seeking work, is further evidence of the increasing tightness in the UK labour market. However, businesses report that the political and economic turbulence, together with significant difficulties finding the right staff, are diminishing recruitment intentions, which is likely to increasingly weigh on the UK labour market over the near term.

“With earnings growth increasing once again, the gap between pay and price growth is widening. However, any boost to consumer spending from stronger real wage growth is likely to be limited by weak confidence levels. The number of job vacancies remaining at a record high is further evidence of the worrying skills shortages plaguing UK businesses, which is constraining business growth.

“More must be done to support firms looking to recruit. Businesses are still waiting for the government’s long-delayed Immigration White Paper to shed light on how they will be able to plug local shortages in the future and find the skills they need to grow.”

Cllr. Sarah Bütikofer, Leader of North Norfolk District Council, is seeking feedback from businesses and members of the public regarding the Council’s services and activities.

Local business owners and residents are being encouraged to consider the one thing that they feel North Norfolk District Council could be doing that it is not currently delivering – these views can be emailed to yourpriorities@north-norfolk.gov.uk

Additionally, Cllr. Bütikofer will be starting the New Year by holding monthly surgeries at the Council’s offices in Cromer with the first session scheduled for Thursday 10 January 2019 from 12.30pm – 5pm.  Half-hour appointments can be arranged by contacting yourpriorities@north-norfolk.gov.uk or calling Lynda McElligott on 01263 516242.  Dates for future sessions will be advertised on the Council’s website at www.north-norfolk.gov.uk.

Commenting on the new initiatives, Cllr. Bütikofer said:

“I invite anyone to make contact the Council with ideas they might have or to visit me to talk through any issues or concerns they have.  This is an opportunity for people to express their views about things that matter to them and their local community and for the Council to understand what is important to the North Norfolk electorate.”

Norwich City Council’s new corporate priorities, approach to savings and proposed increase in council tax are the focus of a public consultation.  Over the last 10 years the city council has achieved £30m worth of savings, new income and efficiencies.  However, central government funding cuts and unavoidable growth leaves the city council with a projected shortfall in future years.

Paul Kendrick, the city council’s cabinet member for resources, said:

“Despite these challenges, the council isn’t proposing any significant service changes in the next financial year. “Instead, we’re adapting financially by generating more income and making savings and efficiencies where appropriate. So I encourage as many people as possible to give us their views on our budget consultation for 2019-20.”

The online budget consultation sets out the council’s new draft corporate priorities and will shape how it will play its role in realising the Norwich 2040 city vision through partnership working, service delivery and income generation.   The consultation asks for feedback on three main elements:

• The council’s new corporate priorities
• Savings approach
• Council tax

To complete the survey visit www.norwich.gov.uk/consultations   You have until midnight on Sunday 6 January 2019 to have your say.

Commenting on the GDP and trade statistics for October 2018, published today by the ONS, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:

“The latest GDP data is further evidence that the drag effect of persistent Brexit uncertainty and the significant cost pressures faced by consumers and businesses is taking its toll on the UK economy. 

“The slowdown on the underlying three-month measure of GDP was largely driven by weaker service sector growth as car sales fell. That said, the service sector still made the largest contribution to overall economic activity, with manufacturing and construction adding little to overall UK growth. 

“The widening in the UK’s trade deficit is a concern and reflects a sharp rise in goods imports. Trading conditions for UK exporters are deteriorating amid moderating global growth and uncertainty over Brexit. Businesses continue to report that the persistent weakness in sterling is hurting as much as its helping, with the weakening currency raising input costs.”

Commenting on the impact on Norfolk-based companies, Nova Fairbank, Head of Policy, Governance & Public Affairs for Norfolk Chamber said:

“Norfolk businesses are playing a waiting game – they are holding back on much needed investment, due to the uncertainty of Brexit and this is impacting on the local economy.  It is vital that they get the clarity and precision they need on future terms of trade; who they can hire; what rules they will need to follow; and what more the government will do to support them through this turbulent period.”

The Norwich Christmas Breakfast has been the most popular Norfolk Chamber breakfast networking event year on year. Attracting over 100 businesses, the morning features a Chamber Member charity, festive networking activities and a hearty breakfast for a cold winter’s morning.   On 6 December we headed for the Holiday Inn at the airport, armed with Christmas crackers and 130 attendee badges.  Our featured charity this year was East Anglia’s Children’s Hospices (EACH) who are in the final stages of building their new hospice here in Norfolk. Attendees came in force in their Christmas attire, bringing donations for EACH, ranging from biscuits to toothbrushes, helping them to stock important goods for the new hospice.  The event opened with free networking time for attendees to grab a drink and meet some new and old faces. Once everyone had taken a seat, we kicked things off with a talk from EACH, updating everyone on the building of the new hospice, the nook, and telling attendees about the all the fundraising they can get involved in. This was followed by a quick networking activity before the Christmas crackers were pulled and breakfast had been served. This gave delegates time to network on their tables and get great discussions going.  We then moved on to hold two more networking activities. For the first, delegates had to order a list of Christmas songs by their release dates, the second they had to match up film quotes to the films. With the event ending the final task was to pick our ‘Best Christmas Outfit’ winner. Chris Cliffe of CJC Procurement Ltd took third place with a light up jumper, Alex Wiseman from Indigo Swan also rivalled with his light up jumper taking second place. However, there could only be one winner, and it had to be David Tuthill from Coleman Opticians. David not only sported a wonderful Christmas jumper, but he wore clip on baubles in his beard throughout the entire event, making him a worthy winner.  The morning then ended with thanks from EACH for the kind donations, and from Norfolk Chamber to everyone for attending. As our last event of the year, we wished everyone a Merry Christmas as they left to go back to their day.

The British Chambers of Commerce, in partnership with DHL, has published its latest Quarterly International Trade Outlook, based on survey and export documentation data. It finds that as the clock ticks ever closer to Brexit, a combination of exchange rates and price pressures is forcing exporters to increase prices.

The survey, of over 2,500 exporters, including those from Norfolk, shows that there is an increasing number of firms who are expecting to increase prices in the next three months. 41% of manufacturers and 34% of service firms surveyed report that their prices will rise, up from 35% and 32% in the previous quarter.

Exchange rates is the top external factor concerning business, with 68% of manufacturers and 50% of services firms citing it as an issue. The vast majority of exporting manufacturers (85%) site the cost of raw materials as a pressure driving prices.

These rising costs are contributing to a slowdown in export orders, with just 35% of manufacturers and 24% of services businesses reporting an increase in orders – compared with 39% and 30% respectively the previous quarter.

This is also reflected in the BCC/DHL Trade Confidence Index, which measures the volume of trade documents issued by Accredited Chambers of Commerce for goods shipments outside the EU. This decreased by 3.86% this quarter and 4.81% compared to the same quarter in the previous year, but still remains high by historical standards.

The current Brexit uncertainty is weighing heavily on business communities across the country. It is crucial that firms get the clarity and precision on the terms of trade they will face with the EU and many other countries in a matter of months. They will also need to know who they can hire, what rules they need to follow, and what more the government can do to support them through this period.

Key findings from the report:

• 35% of manufacturers and 24% of services saw an increase in export orders in the last three months, a slowdown from 39% and 30% respectively
• 17% of manufacturers and 14% of services sector firms saw a decrease in orders
• 68% of manufacturers are more concerned about exchange rates than the previous quarter (up from 60%)
• 76% of manufacturers and 69% of services firms who attempted to recruit, struggled to find the right staff. This is up from the 69% seen in Q2 for manufacturers and 60% for services
• 85% of manufacturers cite the cost of raw materials as a leading source of price pressure, up from 81% in Q2 2018
• The BCC/DHL Trade Confidence Index, a measure of the volume of trade documentation issued nationally, fell by 3.86% on the quarter, but remains high by historical standards

Nova Fairbank, Head of Policy, Governance & Public Affairs for Norfolk Chamber, said:

“The ongoing political and economic turbulence continues to play on the minds of exporters. Every twist and turn in Westminster is pounced upon by the markets, so it is no surprise that the volatility in the exchange rates weighs heavily.

“Despite the continued political turmoil, companies will always find a way to trade with each other. While exporters are doing their best to harness the advantages of the falling pound, its impact on imports in the supply chain often makes this a double-edged sword.

“Giving clarity and precision to firms should be of paramount concern for the government. And at a time of record high skills shortages, the government must urgently publish the Immigration White Paper, to give long-term clarity to firms in all corners of the country who need skills at all levels.”

Shannon Diett, VP of Marketing at DHL Express, said:

“The small decline in the Trade Confidence Index, down 3.9% on Q2 2018 and 4.8% on Q3 2017, is not surprising given the uncertain business climate we’re currently facing. We are however encouraged to see that both manufacturers and service firms remain confident that trade will improve over the next 12 months. We continue to encourage businesses to increase the number of countries they trade with to help reduce future risk and increase the opportunities for growth.”