Expect the unexpected

Professor Frank Peck of the University of Cumbria’s Centre for Regional Economic Development writes for in-Cumbria on the big issues of the day and the economic data behind them. This month, what we learn from 2016, and what lies ahead in 2017. In this first issue of 2017, it seems appropriate to consider events that have had an impact on the Cumbrian economy in the past 12 months. Readers will no doubt recall vividly the continuing trauma of flood impacts on Cumbrian households and businesses at the start of 2016. The scale of the impact is now documented. We know that over 5,300 households were directly affected by flooding as well as over a thousand business premises. The indirect impacts of the flood on businesses both operationally and psychologically were, however, spread much wider. In a survey commissioned by the Cumbrian Intelligence Observatory, while 13 percent stated they had been flooded, two-thirds of respondents claimed that the storms had had some impact on their operations including disruption to supplies, access to markets and clients or ongoing additional travel-to-work costs. While some businesses actually benefited from the floods, particularly those in construction and skilled trades, these are a minority affecting only 11 percent of respondents. As the weeks passed, anxieties about the economy heightened, fed by continued disruption to transport infrastructure and media images of the county that conveyed impressions of “inaccessibility”. A survey aimed at tourism businesses in March 2016 reported a decline in bookings, most worryingly from “repeat bookings”. There was clearly a worry that regular visitors were either changing their habits or delaying decisions until the situation in Cumbria became clearer. As a consequence, business confidence at the start of the season was quite low – over half of respondents ticked the box to say “prospects not great”