Milton Keynes Chamber reveals findings of its latest Quarterly Economic Survey


Difficult trading environments battle cautious optimism as Covid-19 continues to create economic uncertainty in Milton Keynes, according to the results of the latest Quarterly Economic Survey from Milton Keynes Chamber of Commerce.

Quarter 4 presented a mixed picture in terms of the local economic landscape.

The manufacturing sector reported feeling the strain of supply chain shortages and hiring difficulties as inflationary pressure continued to mount.

In contrast, the local service sector remained upbeat with an escalation in new orders both domestic and overseas, driven mostly by improved market conditions because of a sustained lifting of restrictions and a loosening of limits on international travel.

Almost a third of firms in the services sector increased their workforce in the final months of the year and many respondents suggesting that their teams would remain constant in the first three months of 2022. 

Improved economic conditions and boosts from the sustained lifting of COVID-19 restrictions saw domestic orders increase across the board in Q4 in Milton Keynes.  

46% of Milton Keynes services sector firms saw an upturn in domestic sales and an impressive 83% of the manufacturing respondents suggested that both current and advanced orders had either remained constant or increased when compared to the previous quarter. 

The overseas orders uptick for the services sector is in line with the national outlook for exports after the loosening of travel regulations. 

Despite this increase, manufacturing firms are not seeing similar post-Covid highs. 

When looking at the respondents, equal numbers of businesses indicated that overseas orders (both current and advanced) remained constant or decreased when compared to Q3. 

The difficult export environment could be explained by reports of weaker demand from China, alongside disruption to EU trade, partly due to ongoing complications with the EU transition. Further to this, overseas orders may have experienced cancellations due to extended lead times and supply shortages.

Many businesses have continued to be significantly impacted by ongoing supply chain issues, as well as increased raw material costs and longer lead times which appears to be having a subsequent impact on cashflow levels.

Business confidence is slowly improving for manufacturing, with a large majority of businesses suggesting that they expect turnover to increase in the coming 12 months, but many expect a fall in profitability.  

But the services sector remain upbeat, reporting an anticipation of turnover and profitability increasing in the coming 12 months. 

Milton Keynes Chamber policy officer Sean Rose said: “As we move forward into the new year, we find ourselves in a familiar situation with COVID-19 case rates rising due to the emergence of the Omicron variant and another bout of restrictions being put in place to curb its spread.

“This will undoubtedly raise concerns amongst local businesses on how rising case rates (domestically and overseas), could impact demand levels, exacerbate any current labour/supply shortages and further price pressures. However, the impacts could be shortlived if the new variant is efficiently brought under control.”