North/South divide? – the last thing we need is an East/West one

The latest Bank of England business condition reports makes interesting reading, coming out only a matter of weeks after the general election.

Overall most of the headings are coming in with either positive or neutral comments and it would seem that businesses didn’t see a slowdown in investment due to the General Election, only the housing market had a stutter that was attributed to May 7 and the uncertainty around the Mansion Tax.

So with the “business friendly” Tories firmly at the helm and George Osbourne powering ahead with his vision of a Northern Powerhouse we should be able to see a clearer strategy after this summer’s budget on what this all means for the North West.  It may even be landing around about the same time as the much touted first business rates review, who knows.

It is interesting, with Dunlop Heywood having offices in both Manchester & Leeds, to see reaction to Osbourne’s northern powerhouse plans either side of the Pennines. He was, however, pretty canny with the appointment of a North-East MP to be the minister responsible for the key initiatives to drive a stronger northern economy.

Stockton South MP James Wharton has taken on the new role of Parliamentary Under Secretary of State for Communities and Local Government as part of Greg Clark’s department. Much of the early progress has been around transport and the One North programme but Manchester’s devolution path, along with recent investment announcements, has created a few ripples of unease about Yorkshire’s role in the Northern process.

At the moment we have a north/south divide; the last thing we need is an east/west one.

Here is the the BoE report in summary:

  • Housing market activity remained below that of a year earlier, with some contacts reporting a slowing in the run-up to the General Election.
  • Consumer services and retail sales turnover had risen moderately.
  • Investment intentions for the next twelve months were consistent with moderate growth overall.
  • Business services turnover growth had remained robust and broadly based.
  • Manufacturing output growth, both for the domestic market and for export, had edged lower.
  • Construction output growth had continued to ease on a year earlier, but remained fairly robust overall.
  • Corporate credit availability had improved further.
  • Employment intentions had edged higher and were consistent with modest headcount growth overall.
  • Recruitment difficulties had changed little, at a level somewhat above normal.
  • Capacity utilisation had remained at broadly normal levels in manufacturing, but slightly above normal for services.
  • Growth in total labour costs per employee had been steady.
  • Materials costs and imported finished goods prices had remained lower than a year earlier.
  • Output prices had fallen on a year earlier for manufacturers, although they had risen moderately for business
  • services firms.
  • Profitability growth had edged higher for services, but had fallen for manufacturers.
  • Consumer price inflation had remained negative for goods. Retail service prices had continued to increase.

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