Tackle trade deficit to boost regional economy, says business leader

7th January 2016

Yorkshire and Humber must reverse the trade deficit to boost the regional economy, according to a Sheffield business leader.

The call, by Richard Wright, Executive Director of Sheffield Chamber of Commerce, follows the publication of the latest British Chamber of Commerce Quarterly Economic Survey (QES) which assessed business confidence within the manufacturing and services sectors for the final quarter of 2015 (October to December). QES figures for manufacturing in the Yorkshire and Humber region revealed an increase in domestic sales and domestic orders compared with the previous quarter, as well as a boost in figures for cashflow and investment in plant/machinery. Compared with the previous quarter of 2015, figures for both sectors were also higher for employers looking to take on full-time staff. But figures for export sales and orders fell across both manufacturing and the service sectors. Richard Wright said: -The message from the QES results is clear - we must address and reverse the trade deficit. While forecasted growth in GDP is overall looking positive in 2016, the growth is being primarily driven by consumer demand and not on the trade of goods and services with the rest of the world. -The UK trade deficit is still huge and our national debt is growing. In fact consumer-led growth could make it worse because if we import the majority of the goods being bought by the consumer our trade deficit will get worse. -We have to build our capacity to import lower value raw materials and services, add value to them, and then export them back out as high value goods and services. -What is for sure is that 2016 will certainly see reductions in government support services as the spending cuts really bite. What money there is will have to be spent wisely and strategically and the Chamber will really work to influence those decisions. In the Sheffield city region we need to develop a proper economic master plan and to fully identify and understand the economic return different projects have to deliver. -The Chancellor's 2015 spending review tried to move expenditure out of revenue and management and into capital such as transport. These are hard, but ultimately proper, decisions that will ultimately drive productivity and competitiveness in an international world. -If we all step up to the plate and back those moves it will help us reverse that trade deficit, pay down debt, and boost business in our region and across the UK. The QES is Britain's largest and most authoritative private sector business survey, based on almost 7,500 responses from firms. The full QES report can be found at www.economicsurvey.org.uk from 00:01am Thursday January 7.