Challenging times ahead for Sheffield City Region businesses, data shows

Companies across the Sheffield City Region are facing tough times ahead, according to new research.

The latest Quarterly Economic Review published by the region’s four Chambers of Commerce highlighted competition, inflation, business rates and exchange rates as the key challenges for the area’s manufacturing and service sector firms.

The study found that in the last three months, sales balances remained solid for manufacturers but declined for service sector businesses.

Fewer have reported working at full capacity and companies in both sectors are looking to invest less in training, it showed.

For manufacturers, order books are only marginally improving, according to the Quarterly Economic Review. In the case of service sector firms, orders have declined in comparison to previous quarter.

The research also highlighted a decline in business confidence over profit forecasts for the next 12 months. For service sector firms, confidence in this area was at its lowest level in at least three years.

But the situation is not completely downbeat, according to Dr David Littlewood of Sheffield University’s Management School.

He explained: “Most balances remain positive, albeit often less strongly positive compared to previous quarters. There is also some indication that price increases and inflation may be slowing, whilst on balance firms in both sectors report quite robust cash flows.

“Interestingly when businesses were questioned, in early June, about key business challenges, Brexit and political uncertainty did not feature highly; the Q3 survey will show if this continues to be the case.”

Richard Wright, executive director at Sheffield Chamber of Commerce, commented: “These are challenging times for business but we at the Chambers are still seeing lots of member businesses thriving.

“The Chambers and Sheffield City Region Business Growth Hub are working alongside manufacturing and service firms, large and small, to offer business support and signpost them to a large number of opportunity areas including funding.”