Confidence levels among West of England firms have dropped significantly – with orders and sales also down – according to the latest survey by Business West, with the region’s largest business organisation blaming Brexit uncertainty for the slump.
All measures in the survey of around 500 firms were in the red. Export sales and orders in particular were hit, plummeting by 24% over the past year, while UK orders were 10% lower year on year. 
UK sales during the period were down 7% on the previous quarter and 8% on the previous year.
Business confidence – a reliable a measure of future trading – fell by 6% on the previous quarter and by 16% over the year.
The survey – for the first quarter of 2019 – was conducted among a wide range of businesses across Swindon, Bristol, Bath, Gloucestershire and Wiltshire between February 21 and March 11. At the time the UK was still expected to leave the EU on March 29 with a ‘no-deal’ exit still on the table.
Around 1 in 3 firms had also experienced a drop in European orders this quarter, suggesting that customers overseas are hesitant to commit to new spending as long as they remain in the dark regarding the UK’s future trading relationship with the EU.
As well as the key economic indicators in the survey, businesses were asked questions on the government’s handling of Brexit.
Some 55% said Brexit would have a negative or very negative impact on their business, with less than 8% thinking it would be positive or very positive.
Brexit uncertainty was identified as the primary issue facing 82% of businesses, compared to 55% at this time last year.
Phil Smith, pictured, managing director of Business West, which runs the Swindon & Wiltshire Initiative, called the survey results “bitterly disappointing” and said they suggested the paralysis in Parliament and Brexit uncertainty were having a dampening affect across all areas of business activity in the West.
“If these figures are to be believed, it appears that not only has the domestic market fallen flat, our global business is suffering as the UK’s exit date creeps ever closer, but without a clear signal from government that we’ll be leaving with a deal,” he said.
“It is clear that government needs to act to stabilise business confidence at home and abroad. Action is needed to get businesses investing again and to convince customers overseas that the UK is a reliable and attractive place to do business.
“As chaos reigns in Westminster, it seems businesses in the West are having to deal with the repercussions.”
Comments submitted by firms alongside their survey answers were largely negative.
The boss of one unnamed logistics company said: “I have had three tenders from overseas customers (2 x Chinese and 1 x Australian) put on pause due to uncertainty as to what would happen to their goods on arrival to the UK. I have lost a Chinese customer for the same reason to the tune of £100,000 per year.”
And a chemicals company wrote anonymously: “Many European customers are saying they don’t want to buy British made goods. In situations where we are the only manufacturer, the clients have asked if we can consider to relocate production from UK to an EU country.”
Businesses taking part in the quarterly surveys are chamber of commerce members and selected local businesses. The results provide a snapshot of business confidence and trading conditions during the previous three months.
Results from the survey feed into the British Chambers quarterly economic survey, recognised as the largest and most representative independent business survey.
The survey is published in advance of official figures and other private surveys and is one of three surveys regularly reviewed by the Bank of England when setting monetary policy.
