Established in 1989, the QES is the UK’s largest and longest running independent business sentiment survey. It’s completed by companies in Chamber communities across the country with the total sample size being 5,152. 120 firms in the North-east of Scotland took part meaning we have a strong and representative sample from which to compare regional and national data.
The field period for this survey ran from mid- August into September representing the first chance for businesses to record their performance, views and confidence levels since the new UK Government took power at the start of July.
The findings are regularly covered in national media and used by agencies such as the OBR, Bank of England and others as a good barometer of what is really happening in the world of business.
In summary, it shows something of an economy in a holding pattern with companies sitting on their hands, waiting to see what new government business policy will mean for them….but with some concerning regional variations.
Although less than a fifth of responses were from companies in the energy sector, it’s apparent that the huge uncertainties facing the future of oil and gas operations in the North Sea are having a knock-on effect to confidence in the wider North-east economy.
The Chamber has been very clear in its warnings to the new government about the catastrophic economic and jobs impacts of its intended taxation policy.
Of course since the survey closed, there has been some new energy light at the end of the tunnel with confirmation that Great British Energy will be headquartered in Aberdeen and a raft of positive announcements about clean energy projects in the region.
But this will only be good news if we don’t prematurely end North Sea oil and gas as a viable industry. That will not ensure the fabled ‘just transition’ and will risk a repeat of what happened to mining communities in the 80s with the livelihoods of thousands of working people here and in places across the UK cut off with huge impacts on extended supply chains that depend on this disposable income through their tills.
The North-east results of the Q3 survey suggests this is a spectre that looms large.
Future sales pipeline, turnover and profit forecasts are all increasingly pessimistic and significantly worse than the UK results.
Future recruitment intention among regional businesses is the lowest since Q1 2021.
More firms across the UK expect cash flow to improve than their peers here.
Upward price pressures are greater in the NE than in the rest of the country.
Business taxation is of much greater to concern to regional companies than is the case in other regions.
Only 13% of businesses in this area are reporting increasing their investment in plant, machinery and equipment- the lowest mark for almost four years.
And just 4% expect funding pressures on their business to improve over the next year, down from 10% just three months ago.
One bright point is that the North-east continues to outperform the rest of the country in export performance but even some of the indicators in this section provide a cautionary tale.
So, our message to governments at all levels is “listen to what businesses in this region are telling you, sharpen up your policy-setting and decision-making and ensure that 1980s history does not repeat itself in our part of the world this time”