Black Country Manufacturers Reporting Cash Flow Conundrum
30 Jul 2018
Published in: Black Country Chamber of Commerce News
The latest results of the Quarterly Economic Survey (QES), carried out by the Black Country Chamber of Commerce and in partnership with the Black Country Local Enterprise Partnership (LEP), indicate that companies throughout the region have been experiencing issues relating to cash flow.
From a manufacturing perspective, 75% of survey respondents reported either improved or constant levels of cash flow in Q2, a rather significant fall from 90% on the previous quarter and from 82% in Q2 2017. Moreover, cash flow also proves to be a concern amongst manufacturing companies at a national level.
This is further ratified by recent research carried out by American Express, which highlighted that almost half (46%) of decision makers in UK SMEs are distracted from pursuing growth related activities due to concerns pertaining to cash flow and financial pressures.
With regards to the latest QES results, Corin Crane, Chief Executive of the Black Country Chamber of Commerce, commented: "In the months following the collapse of Carillion, manufacturers across the Black Country have reported issues surrounding cash flow and late payment, particularly those who were involved in the supply chain network.
"As a Chamber, we must work with local businesses to help ensure that they are on top of their cash flow so that they may realise their potential for growth, which in turn will boost the Black Country economy. I would encourage any companies that have concerns about their cash flow to contact us and explore the full range of support that is available."
To juxtapose the reported concerns surrounding cash flow, Black Country manufacturers have continued to see a rise in export sales for a third consecutive quarter, with 93% having recorded increased or constant levels for Q2 2018. In a wider context, this is up by 4% on the quarter and 13% on the last 12 months. Furthermore, this rise is in contrast to the national data that reports a decrease in manufacturing export sales.
In relation to this, Stewart Towe, Chair of the Black Country LEP, added: "Official inward investment statistics recently published by the Department for International Trade (DIT), show that, in 2017/18, the West Midlands region had the most number of Foreign Direct Investment (FDI) projects of all UK regions outside London and the South East. In the Black Country, there were 11 successful FDI projects in 17/18 that have created 1,174 new jobs and safeguarded a further 61, with over half of these projects were in manufacturing industries, reflecting that these sectors remain a crucial part of our economy.
"The number of FDI projects in the Black Country decreased in 17/18 compared to the previous year, down 31% from 16 projects. This validates the perceived uncertainty reported in the Quarterly Economic Survey for Q2 2018, leading to decreases in training investment and potentially aggravated by weak domestic sales and ongoing issues with cash flow and poor payment practice."
For more information on the results of the Q2 2018 QES please visit www.blackcountrychamber.co.uk/qes or call 0330 024 0820. In addition, please visit www.blackcountrychamber.co.uk/images/Have_Your_Say/QES/QES_Q2_2018_Report.pdf to download the report.
No comments have been submitted yet.
Post A Comment
You must be logged in to post a comment. Please click here to login.