"In analysing the slight improvements experienced by the Suffolk business community in the three months to September 2023, we asked the question whether this was the start of an upward trend or merely a statistical blip. The figures for the final quarter would suggest the latter." 

Matt Moss, Suffolk Chamber of Commerce's Economy Group chair, was commenting on the latest results from the business campaign organisation's longstanding and highly respected Quarterly Economic Survey. 

In short, the data for the fourth quarter of 2023 confirms the longer-term picture of a trading environment still some way off its post-pandemic peak – and one defined by a series of ongoing challenges.

Most balances weakened across both the Suffolk manufacturing and services sectors, with the improvements that were seen tending to be minor in scale.

Crucially, five of the eight key sales and orders balances in Suffolk are now in negative territory, meaning that more firms are reporting contractions in activity than are reporting improvements, with manufacturers -10% in domestic sales and -21% in domestic orders and service companies on -2% in domestic orders and -18% for both export sales and orders.

Since the end of 2018, the export sales balance for local service sector businesses has only been positive in four of the 20 quarters. The outlook for export order books have been similarly pessimistic, escaping negative territory for just two quarters in the past five years. 

Investment intentions remain very weak, particularly in plant and machinery where manufacturers reported a 17 percentage point fall and service companies one of 10 percentage points compared with the third quarter of 2023.

Cash flow balances for manufacturers fell by 26 percentage points to -26%, although the figures for service companies witnessed a small improvement to +2%

However, in spite of these declines, most other balances remain in positive territory, including all of the measures relating to confidence, such as future turnover and profitability, with the exception of the Suffolk service sector's confidence in improving profitability, which was neutral.

Suffolk firms continue to take on new staff and aim to fill further vacancies in the coming quarter. The labour market remains tight (this has been the case since 2017), with most businesses experiencing difficulties in recruiting staff, particularly in the manufacturing sector. 

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Concern over inflation among Suffolk respondents eased again to its lowest level since the second quarter of 2021, but three in five firms still see this as a worry, and around half of respondents reported intentions to raise prices. 

The number of businesses reporting that corporate taxation was a worry rose again, with two out of every five now listing this as having an impact on their operations. 

Matt Moss continued: "These figures describe a general business reality stuck in third gear. Suffolk Chamber remains convinced that this logjam of aspirations and challenges will only be overcome once businesses start seeing a greater level of coherence between fiscal, monetary and supply side policy making at a national level."

Paul Simon, Suffolk Chamber's head of public affairs added: "These figures are déjà vu all over again, suggesting a county economy that remains rather becalmed and certainly some way off its full fighting potential. 

"As we enter a General Election year, the Chamber will be the using the evidence from our Quarterly Economic Surveys to develop a pro-business manifesto which we will be sharing with both sitting MPs and all other Parliamentary candidates for their views and support." 

Suffolk Chamber is grateful to Suffolk Knowledge, part of Suffolk County Council, for providing the analysis of this QES.