The region is experiencing a sharp contraction of economic activity, but whilst county economies share a number of common issues, the constituent business parts of the overall picture do have a number of distinct variances.

Uncertainty and lack of confidence are two significant factors affecting the decision making process of business leaders in Lincolnshire. National predictions of a sharp downturn and the impact of the credit crunch currently seem to be having a disproportionate impact on the willingness of businesses to invest. We are finding that the picture, whilst bleak in some areas, is not always as pronounced within the county as the national perspective would suggest. Businesses are expecting to find trading conditions in 2009 difficult, but there are signs that the Lincolnshire economy as a whole may not feel the extremes that other areas of the country will be exposed to.

It is worth underlining that we have a number of companies still reporting successes at this time. Some of the businesses bucking the trend at this stage have diversified into a number of areas and others have exposure to export markets. Whilst overseas markets are increasingly tough, businesses in Lincolnshire have been able to benefit from the weakness of the pound which has allowed exporters additional competitiveness with their international trade.

There is currently a high level of activity amongst the business support community with a key focus on ensuring businesses survive the downturn. A challenging and critical focus on the basics, or fundamentals of businesses, is likely to give local companies the best chance of survival over the next year.

Whilst it is eminently sensible to have a cautious outlook in what are unchartered waters in 2009, we feel that it is also important for individual businesses to focus on their own business model and seek out good news stories as well as being critical of the significance of the national perspective in their own market place.

While it is uncertain how prolonged and deep the recession will be, it can be said with certainty that demand, and subsequently growth, will return. It is therefore imperative that, when this happens, policymakers have a recovery plan in place. This plan should act to foster growth in the short-term and lay the foundations for economic stability in the long-term.

We feel that immediate action should focus attention on stimulating demand and restoring the pervasive lack of confidence felt by businesses and consumers, whereas long-term initiatives should be geared towards achieving greater balance within the UK economy.

To this end, the Chambers of Commerce have set out policies that should be implemented now, including tax proposals and measures to restore confidence, and policies that will benefit the UK economy in the medium and long-term, such as skills development and infrastructure incentives.  

Furthermore, the global slowdown has exposed weaknesses within the economy that need to be addressed. For example, the growth of the public sector and the narrow reliance on financial services for growth needs to change, with manufacturers and exporters having particular attention paid to them.    

When looking in particular at International Trade, there are huge opportunities for when the world economy begins to grow again and demand returns to foreign markets. The competitive position of sterling only adds weight to the potential that can be realised.

However, taking advantage of this will not all happen naturally and requires the intervention of government. This help should include:

• Analysis of strategic exports to prepare for the recovery of demand in world markets (along the lines of Germany’s strategic nation exporting plans)
• Subsidies for strategic exporting companies who are currently facing problems;
• Campaigns promoting importance of exporting along the lines of the 1940’s and 50’s; and,
• “Trade Skills” National Skills Academy