Economic Outlook: Divergent Trends in the UK and Greater Manchester

The latest Trade Confidence Outlook for Q2 2024, published by the British Chambers of Commerce (BCC), paints a sobering picture for UK SME exporters. Based on a survey of nearly 2,000 businesses, overseas sales appear to be mostly stagnant, with 52% of SMEs seeing no change and 21% experiencing a decrease. Despite a minor three percentage point uptick, only 27% of SME exporters reported an increase in export sales. 

This stagnation has been a persistent issue since the pandemic, with the BCC’s SME export sale indicator consistently underperforming compared to domestic sales. Only 14% of SMEs reported a decrease in overseas sales in Q2 2018, compared to the current 21%. In contrast, 37% of SME exporters reported an increase in sales this quarter. Forward-looking indicators are also less promising, with declines in advance orders across the board. 

William Bain, Head of Trade Policy at the BCC, emphasised the need for government intervention to revitalise exports. Despite some steps like trade strategy announcements and renewed trade negotiations, significant challenges remain, particularly around regulatory divergence with the EU. 

In contrast, the Greater Manchester Quarterly Economic Survey (QES) for Q2 2024 offers a more optimistic outlook for the region, with a notable rebound following a sharp decline in Q1 2024. The Greater Manchester Index™, a composite indicator of key QES measures, soared to 30.6, a significant 27-point increase from the previous quarter. 

Key highlights include increased sales and growth in both business and consumer confidence, rising domestic and overseas demand along with higher recruitment activity, and improved cash flow positions with reduced inflation concerns now at the 2% target. This positivity is partly attributed to the new financial year and the anticipation of potential economic policy shifts with a new government. Demand data for Greater Manchester shows that domestic sales and advanced orders have improved compared to the previous quarter, while overseas sales have hit their highest levels since late 2022, marking a significant recovery. 

Susana Córdoba, Head of International Trade at GM Chamber, said "Whilst QES Q2 Results are encouraging for the GM Economy, it is also important to acknowledge that the global trade landscape remains challenging overall with tensions derived from the ongoing Russia invasion to Ukraine as well as in the Middle East, the upcoming USA elections, the current Red Sea disruption and much more. UK Companies also need to be vigilant of upcoming changes in EU Regulation and we continue to ask government to consider these in future negotiations with the EU.” 

Greater Manchester's ability to bounce back and thrive amidst broader economic challenges and underperformance highlights the region’s resilience. As the largest accredited chamber in the UK, GM Chamber is dedicated to supporting all businesses across all sectors, from sole traders to MNCs. In this time of economic uncertainty, turn to us for comprehensive support to help your business succeed, including international trade support. With over 230 years of experience, our dedicated team is committed to providing expert advice, networking opportunities, and tailored solutions that address the unique challenges and opportunities facing businesses today. 

 For more information and to view the services we offer, visit our website at https://www.gmchamber.co.uk, or call 0161 393 4321. 

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Source: British Chambers of Commerce