COUNCIL MEETING AND ECONOMIC BRIEFQ1 2013

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QUARTERLY ECONOMIC SURVEY• RESULTS FOR Q1 2013

NATIONAL OUTPUT

Source: Bank of England Inflation Report/Office for National Statistics National Accounts

– Demand– Service sector weaker, but remains positive– Manufacturing domestic contraction, but export orders

improve

– Employment– Remains positive and strengthens ahead– Shift to temporary hires in services

– Investment– Intentions still weak– Manufacturing up slightly– Services ease

– Confidence– Services hold at post-recession high, manufacturing

eases reflecting underlying weakness in construction

HEADLINE RESULTS FOR Q1

QES v NATIONAL OUTPUT CORRELATION

Source: Greater Manchester Quarterly Economic Survey/Office for National Statistics National Accounts

DOMESTIC PRODUCTION DEMAND – SALES

Source: Greater Manchester Quarterly Economic Survey

NORTH WEST CONSTRUCTION ORDERS

Source: Office for National Statistics Regional Construction Sector Statistics

QES CONSTRUCTION ORDERS v ONS DATA

Source: Greater Manchester Quarter Economic Survey/Office for National Statistics Regional Construction Sector Statistics

QES EMPLOYMENT v JSA COUNT

Source: North West Quarter Economic Survey/Office for National Statistics Labour Market Statistics

– Treat official headline numbers with caution– Policy driven increase in claimant count– Public sector losses– Some corporate failures and temporary workers

released– Private sector still creating jobs and stronger intentions

ahead

– Manufacturing– Skilled positions the most difficult to fill– Construction sector also recruiting, reversing Q4 decline

– Services– Slight shift to temporary hires– Clerical positions the hardest to fill

EMPLOYMENT HIGHLIGHTS

EXPORTER CONFIDENCE – Q1 2013

Source: Greater Manchester Quarter Economic Survey

EXPORTER CONFIDENCE – Q4 2012

Source: Greater Manchester Quarter Economic Survey

NORTH WEST EXPORTS 2011 v 2012, £m

Region 2012 2011 Change

EU 12,719 50% 13,655 52% -6.8%

Asia & Oceania 4,498 18% 4,419 17% 1.8%

Eastern Europe 369 1% 395 1% -6.5%

Latin America & Caribbean 400 2% 372 1% 7.7%

Middle East and N Africa 1,253 5% 1,162 4% 7.8%

North America 4,505 18% 4,938 19% -8.8%

Sub-Saharan Africa 343 1% 357 1% -4.0%

Western Europe exc EC 1,117 4% 1,110 4% 0.6%

Total 25,204 100% 26,407 100% -4.6%

Source: HMRC Regional Trade Statistics

NORTH WEST IMPORTS 2011 v 2012, £m

Region 2012 2011 Change

EU 13,094 50% 14,755 54% -11.3%

Asia & Oceania 6,070 23% 6,118 22% -0.8%

Eastern Europe 1,120 4% 687 3% 63.0%

Latin America & Caribbean 593 2% 557 2% 6.5%

Middle East and N Africa 1,487 6% 1,296 5% 14.7%

North America 2,514 10% 2,855 10% -12.0%

Sub-Saharan Africa 289 1% 283 1% 2.2%

Western Europe exc EC 845 3% 793 3% 6.5%

Total 26,011 100% 27,345 100% -4.9%

Source: HMRC Regional Trade Statistics

– Manufacturing– Demand eases, with it do intentions to increase prices– Raw material price pressures– Exchange rate concerns– Competition eases in manufacturing, more intense for

constructors

– Services– Sustained level of those operating at capacity with

intentions to pass on price increases– Pressure from input prices and overheads– Though competitive pressure intensify

– Interest rate concerns rise after two quarters of falls

INFLATION & COST PRESSURES

PRODUCER INPUT PRICES

Source: Office for National Statistics Producer Prices Index

EXCHANGE RATES

Source: Royal Bank of Scotland Databank

BANK OF ENGLAND INFLATION – AUGUST 2012

Source: Bank of England Inflation Report August 2012

BANK OF ENGLAND INFLATION – FEBRUARY 2013

Source: Bank of England Inflation Report February 2013

– Mixed picture– Domestic v Export– Sectoral and sub-regional disparities– Retail: Shift to online / Powerful retail centres

– Employment remains positive in private sector– Inflation remains a pressure for household and

business– Business margins could be squeezed– Investment weak with low growth and uncertain

outlook– Finance challenges

– Long term options for business, but complex/tinkering by Government?

CONCLUDING REMARKS

THANK YOU

QUESTIONS AND DISCUSSION

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ACTION FOR BUSINESS•Budget 2013

•Ongoing Action

•Open Forum

BUDGET 2013•Housing Market - centered around Help to Buy, part of a £5.4bn

package designed to tackle long -term problems in the housing market

starting April 2013. A further 15,000 affordable homes announced.

•Business Bank – accelerated deployment of £1bn capital, improve

existing schemes and develop a new institution to support SMEs.

•Heseltine Review response – confirmation of the setting up of a

single local growth fund.

•Employment Allowance - from April 2014 all businesses eligible for

£2000 Employment Allowance – reduction off employer NICs.

•Business Rates – no reference to Business Rates, universally

recognised by business organisations as being a major issue for

business.

ONGOING ACTION

•Procurement – ongoing work through Action For

Business forums and presentations, mandatory use of

PAS91

•Real Time Information – lack of awareness

•Export – major new BCC initiative in 20 target markets,

local connections with overseas Chambers

OPEN FORUM

• Any other issues?

• Any questions?

• Over to you……

THANK YOU

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