Tough year ahead but our region can pull through

SUCCESS Manufacturing is strong but more needs to be done
SUCCESS Manufacturing is strong but more needs to be done
Peter Axworthy at the OffBeet cafe

High demand could mean expansion for cafe owner

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CALLS have been made by several sectors in the south east for the government to do more to help firms and to settle the economy as fears of a second recession hitting in 2012 grow.

As reported elsewhere in The News today, house prices locally are on the rise, unlike the rest of the country, and Gunwharf Quays is bucking the trend and encouraging more and more people to visit Portsmouth.

But while those recent successes, and strong manufacturing and commercial property sectors are encouraging, business analysts and surveys say more could be done.

Neil Hawkins, of Chandler Hawkins chartered surveyors said: ‘The banks do need to be encouraged to start lending money again, because despite what they say, they aren’t.’

Here, we asked four experts from different sectors what they predict will happen to the economy in 2012.

MANUFACTURING

THE region’s manufacturing industry has been shoring up the UK economy since the credit crunch hit in 2007.

It continues to be successful in creating jobs, not least through new apprenticeships.

But manufacturers’ organisation EEF says more needs to be done by the government.

EEF south east region director Jim Davison said: ‘As our biggest export market, continuing problems in Europe are certainly leading to a lack of confidence in the short term.

‘The increasing economic uncertainty has resulted in EEF downgrading its forecast for manufacturing growth in 2012 to just 0.9 per cent.

‘However, manufacturing still looks set to perform well in relation to other parts of the UK economy in 2012 and I would strongly encourage the government to increase the momentum of support for the sector to help rebalance and boost the economy.’

HOUSING

PROPERTY prices in Portsmouth are likely to remain static again next year, according to chartered surveyor Neil Hawkins, of Portsmouth firm Chandler Hawkins.

He says it will all come down to whether the banks increase their lending rates and more is done to help the owner/occupier housing market.

‘I don’t think there are going to be any significant changes in 2012. It’s going to be steady but still reliant to the banks lending money.

‘If they do, great, but if they don’t we’ll be in the same position as in 2011.

‘The Portsmouth area actually bucked the national trend with a two per cent increase in house prices this year.

‘The banks do need to be encouraged to start lending money again, because despite what they say, they aren’t – and that pressure needs to come from the government.’

BUSINESS

INCREASING costs and falling demand are impacting business confidence in the year ahead.

But whilst business advisor Baker Tilly says firms in Hampshire are taking steps to meet the challenge head on, most still expect to maintain UK sales and keep their staff numbers the same or higher.

Mike Blain, office managing partner for Baker Tilly in Hampshire, said: ‘2012 is likely to be a year where businesses focus on confirming “their house in order” so they are robust enough to seize opportunities as they arise.

‘In managing both their risk and financial exposure they are mitigating against the possible impact of falling suppliers or customers.’

The firm’s findings have come from a YouGov survey of firms across the UK.

It showed that in the south east firms were excelling at developing new products and services, developing technology and cutting costs.

COMMERCE

HAMPSHIRE Chamber of Commerce believes there are ‘challenging times ahead’.

Captain Jimmy Chestnutt, chief executive of the institution, made the comments after a chamber survey revealed businesses were finding it increasingly tough to survive.

He said: ‘This is a worrying time and we are in for some seriously challenging times ahead.

‘The government must do all it can to manage the downward pressures on business and maintain confidence in regional economies.’

The survey, taken for the final quarter of 2011, found that less than a third of its members reported any increase in UK sales, which was seven per cent down on the previous three months.

The survey also revealed that nearly three-quarters of firms are battening down the hatches and redefining their targets in order to survive the year ahead.