Nick Lambert reviews Sheffield City Region's business performance over 2018 and into 2019
It is disheartening that with March 2019 as the deadline for the UK’s withdrawal from the EU none of us yet know whether that will take place on the basis that there is to be no-deal, or on the basis of the withdrawal agreement, which has not yet been voted on by parliament, nor for that matter do we even know whether there is to be a Brexit at all.
Meanwhile, businesses across the country and throughout our own Sheffield City Region are doing their best to plan for the future with little to no information about the effects of Brexit on trade or measures that may be put in place by Government to help them.
Despite the uncertainty, Sheffield continues to attract a steady stream of investment from property developments, substantial construction works and infrastructure projects which are rapidly transforming the city and creating a better environment for businesses and for leisure.
The local business economy remains resilient, at least for the time being, but there is no mistake that the likely chilling effects on the regions economy of a no-deal Brexit have come into sharper focus given the chaotic events in Government during December.
There is now a palpable reality which may in fact see the UK leave the EU without a deal and potentially default to WTO trading rules.
Accordingly, there is little doubt that the persistent uncertainties about Brexit are not assisting growth of the local economy and despite the fact that in the third quarter of 2018, the UK economy actually strengthened, most commentators are seeing this as a blip.
The true story is probably laid bare by the fact that business investment fell by 1.2 per cent in the last quarter and that’s the third quarter in a row that such investment has fallen, which marks the longest period of contraction for very many years.
Although inflation is holding steady, we can expect that to alter if we leave Europe without a deal, due to the relatively fast impact that a no-deal exit will have on the value of sterling.
Additionally, high street retail sales have slumped in the last quarter and although this is a national trend and has much to do with a shift to online shopping, it is also due to a lack of consumer confidence, once again motivated in the main by Brexit uncertainties as households look to hedge any downturn by restricting their spending.
Overall, economic conditions seem to be deteriorating and it’s probably only a question of time, perhaps quite a short time, before that shows up in the performance of local businesses and the local economy.
However, regardless of the outcome of the Brexit process, the fact is that Sheffield business is resilient and capable of adapting. Despite the doom-laden forecasts we see across the country, Sheffield is a city with a strong offer of skills, education through two notable universities, affordable commercial property and a great commercial offer and is well placed to meet whatever trading conditions prevail after 11.00pm on the 29th March.