THERE can be no doubt the EU referendum has dominated the agenda during 2016, and that looks set to continue for some time to come, Leigh Taylor tells The Northern Echo.

The overriding theme has been uncertainty.

Uncertainty about new orders and contracts, about job creation and investment.

The effect of that has been that many SMEs in the North-East, and across the country, have found it challenging to make big decisions about their future until the referendum has played out and implications become clear.

This was reflected in the latest Lloyds Bank Purchasing Managers’ Index, the leading economic health-check of the UK regions.

New business takes a knock.

The North-East economy had appeared to be standing up to the prevailing environment reasonably robustly, achieving a six-month high index reading of 52.5 in June.

But in July – the first full month since the referendum result – it suffered a marked setback.

PMI dropped to 46, the sharpest rate of decline in business activity in four years.

A PMI reading of above 50 signifies growth, and below 50 signifies contraction.

The major factor causing activity to slow was a drop in incoming orders.

The North-East saw the quickest decline in new incoming business orders of all UK regions, falling at the fastest pace in almost seven-and-a-half years, causing local firms to scale back activity and shed jobs.

While that presents potential headwinds for the coming months, the Bank of England’s decision to cut interest rates was designed to tackle this short-term challenge, helping to encourage investment that may have been put on hold.

Looking further ahead, there are some positive initiatives in the region to promote investment in skills, infrastructure and more.

A brilliant example of this is the upcoming Durham Business Information Exchange, which will bring together more than 50 regional business support organisations to showcase the help they can provide to ambitious local firms.

Too soon to tell?

It’s worth remembering that our region is not alone.

Business activity in London and the South-East was actually hit harder by the referendum.

Employment in the North-East remains at a record high, the regional economy is more diverse than it once was and the post-referendum drop in the value of the pound has certainly been helpful to some exporting manufacturers, though others will have experienced input cost rises.

It’s early days yet and we still lack the hard economic data we need to judge the ultimate impact of the referendum, but it is clear that North-East businesses, will need support through the process.

We need to ensure investment in skills, productivity and infrastructure continues unhindered.

Much will ride on the Government’s negotiation of new trading relationships with Europe and beyond, but in this new phase for Britain, we remain committed to supporting North-East SMEs and funding business investment.

We are working closely with firms across the region to help them understand the new business environment and support their growth strategies, to ensure the North-East maintains its competitive position in domestic and global marketplaces.

Leigh Taylor is regional director for SME banking in the North-East and Yorkshire at Lloyds Bank Commercial Banking