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Is the future becoming clearer?

By Carl Jones

Anyone seen the classic 1993 film Groundhog Day? Bill Murray stars as an ordinary working bloke who finds himself inexplicably living the same day over and over again.

Well we seem to be trapped in one of those scenarios right now. This time last year, we were speculating about what Brexit would mean for the Shropshire economy, coming to the conclusion it was too early to say, and we’d doubtless know much more in 12 months.

Yet here we are, a year on, and it seems we are really not much the wiser.

Talks are still yet to begin about what our trading partnership is going to look like when (or indeed if) we do leave the EU in April next year.

And this lack of a coherent direction with Brexit trade talks is being seen as a far more serious in 2018 than it was a year earlier. The clock is ticking, and businesses need to know what the trading climate is going to look like when D-Day arrives.

Will we get tariff-free access to the European market? Will it be a Canadian or Norwegian-style package? Or might we run out of time, and pull out with no deal at all, relying on World Trade Organisation rules? For the many companies in Shropshire which import or export goods and services, there is a huge difference.

Uncertainty is the enemy of business. Nevertheless, Chris Greenough, commercial director at Salop Design & Engineering in Shrewsbury, is among many local bosses who have entered 2018 with a mood of optimism.

He says: “Not only have we seen one of the best years in terms of enquiries, sales and potential for UK manufacturing, but we have a renewed optimism and enthusiasm for the years to come.

“Brexit is a positive for us, and the only uncertainty is this current government and their ability to get the right deal. They need to unite, and get better at doing the day job, and with this will come a stronger position in the negotiations with Europe.

“We have as a business, invested in our facility, people, and indeed the region. The new Marches Centre of Manufacturing & Technology in Bridgnorth is an employer-led, £4 million training hub that will allow businesses in our region to grow, allow us to raise GVA and help us truly tackle the skills gap.

“We are committed to our region and sector, and look forward to 2018 with a great sense of achievement and excitement. We are one of the many movers and makers, helping push the UK economy forward.”

International trade expert Nicole Gunter, managing director of Global Freight at Halesfield, Telford, believes a new export strategy for the UK must focus on investment to support smaller businesses in the post-Brexit era.

She is calling for the Government to review the practical and financial support on offer for SMEs in its export strategy, which is expected to be published in the coming weeks.

She is concerned that the Government's commitment to deliver ‘better support for medium and larger business’ could see smaller companies missing out.

“This review is urgently needed and I'm delighted to see promises in the industrial strategy to work with the private sector to ensure that the advice being given to exporters is good advice.

"This guidance will be vital as we leave the EU and while negotiations on new trade deals continue. But there is a swathe of small companies right across the country that are already exporting and they will also need better support to access high quality good advice and, of course, new markets too." 

Nicole adds: “There's no doubt that businesses are already preparing for what comes next, looking at developing new export markets outside of the EU, particularly with China, America and Australia.

"What we're also seeing is a shift in supply chain work. Where customers may previously have imported components from Europe, they are now looking for alternative suppliers.

“They are either developing new relationships outside of Europe or focusing on building a local supply chain, which is obviously an opportunity for those supply chain businesses in the UK.”

Richard Sheehan, chief executive of Shropshire Chamber of Commerce, believes much of the business landscape for 2018 is likely to be a mirror image of 2017.

He says: “With the ongoing sparring between the UK and the EU set to run and run, we can expect continued uncertainty which will directly impact on business confidence, investment decisions and economic growth,” he says.

“However, we must say that we have witnessed on many occasions the amazing resilience and ‘roll your sleeves up’ mentality of our business community, as they make the most of what is available. It’s just what business people do.

“As we passed through 2017 we were delighted to see and provide support for the significant amount of Shropshire goods and services being exported around the world. Many have gone to new markets outside the EU with the Middle East and Americas high on the activity lists.”

He continues: “It is widely expected that business will come under increasing cost pressures through 2018 with the pound still weak against the Dollar and Euro. Raw material costs are high on the list of concerns for our businesses; as an example, paper costs have increased by 30% in the last 12 months, impacting on profitability and leading to price increases.”

With unemployment levels low and ongoing uncertainty for EU nationals impacting on recruitment of skilled labour, Mr Sheehan says it is highly likely that we will experience pressures on wage demands, further compounded by potential staff churn, all leading to higher business costs and impacting on inflation

“We can expect our 2018 journey to deliver continued challenges around productivity. Government must do more to incentivise the use and development of technology to combat the expected deferred business investment fuelled by uncertainty.

“As the county’s chamber, we are well aware of the need for connectivity and collaboration. We will continue to be the catalyst that brings our businesses together as they seek out new opportunities and relationships.

“We have expanded our focus to sector specific events with our Manufacturing and Professionals Partnerships going from strength to strength, and 2018 will see us launch a number of technology-based projects that will enhance our offering and create economic wealth.

“Our policy work has never been more important, with our Quarterly Economic Survey feeding into Westminster making sure the voice of Shropshire business is heard, helping to shape Government policy of the future.

“Brexit - whatever the outcome of our negotiations - will significantly shape our economy for the foreseeable future, and the 52 accredited Chambers of Commerce are ready, willing and able to ensure Government doesn’t lose sight of the unintended consequences on business that the wrong type of agreement can have. Accountability is key in this.

“We are committed to supporting the work of the Marches LEP and other contributors to our economy. Working in collaboration for the good of Shropshire and our economy, we will make sure that we profile opportunities for support to our wider business community, making sure if it’s available and if you need it you know about it.”

Many of the measures mentioned in Philip Hammond’s November budget will have implications on the business community this year.

Valerie Hulme, group manager for apT, Telford & Wrekin Council’s in-house commercial development consultancy, says: “The Chancellor said there would be new pressure to make land holders develop sites, by deallocating sites in local plans, and a review of build outs, which is good news.

"We also think first-time buyer-led developments, where consent can be granted outside of local plans on the condition of a high proportion of homes offered for discounted sale or affordable rent, is an interesting approach which could bear fruit. 

“There was an announcement that minimum housing densities, in urban areas are coming back, which can be a double-edged sword because they don't always account for the subtleties of individual development schemes.

"Our biggest concern would be over the creation of a permitted development right to allow commercial buildings to be demolished and replaced by homes.

“There are a lot of factors around that which can give rise to future problems if they are not dealt with appropriately, such as infrastructure and amenities, context and character and neighbouring property uses, which should be carefully considered. 

“The loss of sites can also have a more strategic impact on the plan delivery, putting pressure on other locations to accommodate commercial sites. We eagerly await the consultations."

Confidence is high at IT company Bespoke Computing, which has its headquarters at Stafford Park in Telford.

Managing director Chris Pallett says: “We have lots of project work booked into the first quarter of 2018 with a really good pipeline of business to follow that is building on a very successful 2017.

“Our team is expanding too with a new starter coming on board early in the new year, with plans to recruit for several new posts soon afterwards.”

Elsewhere, landowners and farmers in Shropshire with land or redundant farm buildings in rural areas are being urged to consider putting forward sites for employment development this year.

Shropshire Council is looking for an additional 156 hectares of employment land, and Amy Henson, a planning consultant with Berrys of Shrewsbury, says: “This is a massive opportunity for farmers and landowners to maximise property values”

The preferred employment land requirement for Shropshire from 2016 to 2036 is for the development of around 300 hectares of employment development. Only around half of this is so far committed.

The suggested locations for employment development include 50 hectares in Shrewsbury, 14 in Shifnal, four each in Bridgnorth, and Ludlow, five in Albrighton, two each in Broseley, Wem and Church Stretton, one in Highley and Cleobury Mortimer, half a hectare in Much Wenlock – and a further 71 in rural areas.

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http://www.connexis.co.uk

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