NEW economic research suggests the region’s manufacturing and service sectors are encountering turbulence on their road to recovery.

An economic survey of the last quarter of 2010, by St Helens Chamber of Commerce, reveals that, after growth in the previous two quarters, manufacturers saw a dip in domestic sales (down 20 points on the previous quarter) and growth among service sector firms also remains sluggish.

The drop in domestic order books for the third quarter in succession for both sectors is also a concern, particularly for service sector businesses which have not seen any positive growth since 2008.

Chamber director of enterprise development, Sara Williams, said the Government must support recovery hopes: “St Helens businesses have done exceptionally well considering the many challenges they have faced over the last couple of years.

“However, as we enter 2011, businesses face some major challenges as the UK implements its forceful deficit reduction programmes, and St Helens will not be immune to these pressures.

“Government has a key role to play in supporting business in order to safeguard and help create new jobs.

“There must be a relentless focus on ensuring that businesses are able to invest, export and create jobs. The Government must avoid new business taxes and measures that damage initiative, enterprise and innovation.

“Business is willing and able to drive the recovery, but it can only do so if the Government backs its words with actions. Promoting stronger economic growth should be the Government’s main policy priority.”

The Chamber’s survey revealed business confidence still remained positive, and there have been encouraging indications with improvements in employment growth and investment plans.

However, in contrast, a poll by Lloyds TSB Commercial today revealed concerns over future prospects among North West firms.

The Business in Britain Confidence Index, which tracks firms’ views on sales, order books and profits for the next six months, has slipped to a balance of 6% – from 13% in the last survey.

This balance is 9%below the national average of 22% over the survey’s 16-year history and Lloyds TSB Commercial regional director John Robson said: “Businesses in the North West are without a doubt less upbeat than they have been about prospects for sales, orders and profits.”