THERE was mixed news for businesses at Somerset Chamber of Commerce’s annual Somerset Economic Update event yesterday (Thursday, May 23) when details of a £1bn investment in the South West was tempered by warnings of the negative impact of the continuing Brexit uncertainty.
Around 80 business leaders were given a critical insight into the state of the Somerset economy and forecasts for the future at the event which was held at Haynes International Motor Museum, near Sparkford.
They heard from speakers from the Bank of England, merchant bankers Salamanca Group, EDF Energy’s Hinkley Point C project and both the British Chambers of Commerce (BCC) and the Somerset Chamber of Commerce.
Donna Kehoe, the Bank of England’s South West representative, said she believed consumers would keep spending as pay continued to rise faster than prices and was hopeful about the post-Brexit landscape.
She said: “Looking further ahead, as the uncertainty created by Brexit begins to fade, businesses will return to investing, helping the economy to grow a bit faster in 2020 and beyond.
“As a result, the Bank will probably need to raise interest rates a little to meet our 2% inflation target. But these increases will be limited and gradual. And for the moment Bank Rate remains at 0.75%.”
But David Bharier, of the BCC, said the results of the BCC’s Quarterly Economic Survey – the UK’s largest independent business survey – showed an increasing number of firms across the South West were currently reporting worsening conditions.
“While UK GDP growth strengthened in the first quarter, this can be attributed in part to a temporary boost from stockpiling, as firms prepared for a possible no-deal Brexit on March 29. Our survey shows that the underlying business conditions remain tough as firms face further political and economic uncertainty, as well as rising cost pressures,” Mr Bharier said.
Martin Bellamy, Chairman and Chief Executive of Salamanca Group, the company behind Gravity situated on Junction 23 of the M5, said the Group had invested in the site due to its size, established infrastructure and attributes, strong local political drive and ability to act as a catalyst to strengthen the South West’s regional proposition.
Mr Bellamy said: “Gravity’s ambition to become the UK’s leading Innovation Campus in Clean Growth is a wider opportunity for the Bristol – Exeter corridor. The concept of the South West as a dynamic heart of Clean Growth in the UK is achievable and capable of bringing new investment, partnerships and businesses to the area.
“It would be a sustainable point of differentiation between the South West and the rest of the UK, namely The Northern Powerhouse, Midlands Engine and Oxford-Cambridge arc.
“Gravity wants to be an active partner with local stakeholders to transform this ambition into reality. As a new member of the business community, we’re keen to work in collaboration with the region to support the local and regional industrial strategies.”
There was also good news from Jamie Driver, Senior Supply Chain Engagement Manager at EDF Energy’s Hinkley Point C project, when he outlined the growing positive impact of Hinkley Point C on jobs, skills and people in the South-West and beyond.
Spending with South West businesses reached £980m by the end of January and has now topped £1bn. A further £500m is ready to be spent in new contracts which have already been signed.
Mr Driver said: “We can all see the incredible progress being made on-site at HPC in terms of construction, but we have also been working on delivering our targets for wider economic benefit.
“We have worked hard to make the project accessible to local people and businesses. We have made sure that the massive inward investment made into the HPC is a catalyst for social and economic benefit in the South West and beyond.”
Stephen Henagulph, Chief Executive of Somerset Chamber of Commerce, said the morning had provided a good insight into the state of Somerset’s economy and plans for ongoing and new investment in the area were to be welcomed.
“Like many businesses across the UK, Somerset firms are feeling the pain caused by a lack of clarity over Brexit, but there is also much to be positive about.
“The South West has the lowest unemployment levels since 1975 and high employment means continued consumer spending will support the economy. We also have one of the largest construction projects in Europe on our doorstep at Hinkley Point C and a huge investment in the pipeline at the Gravity site near Bridgwater,” Mr Henagulph said.