Record demand from customers is keeping many Lincolnshire companies buoyant, according to a new survey of county businesses.
The proportion of firms reporting an increase in domestic sales rose by three per cent over the last three months, which is an all-time high, says the report.
However, it warns that many firms are facing huge costs due to transport delays caused by disruption at Calais while exporters are also suffering from tough trading conditions overseas.
The findings are contained in the latest quarterly economic survey for Lincolnshire.
It has been drawn up by the Lincolnshire Research Observatory for the Lincolnshire Chamber of Commerce with the University of Lincoln,
It states that domestic demand is enjoying a sustained period of growth and there has been an increase in the number of businesses expecting profitability and turnover to increase over the next 12 months.
It states the proportion of businesses reporting an increased domestic sales rose by three per cent.
It adds that this is an all-time high and which shows no obvious signs of abating.
Other key figures show that many companies have cause for optimism.
The survey finds many businesses feel confident that turnover and profitability will increase over the next year.
It states that 55 per cent of firms expect profits to increase over the next 12 months with 60 per cent expecting turnover to increase in the next year.
And 37 per cent report that their cash flow has improved.
However prospects are not so bright for exporters with overseas and sales orders falling for the first time since reporting began in 2009.
Simon Beardsley, chief executive of the Lincolnshire Chamber of Commerce, said: “These latest survey results are somewhat disappointing, with manufacturing firms experienced dampened growth.
“The manufacturing sector is facing many headwinds, particularly difficult global circumstances. Eurozone growth, although edging up slightly, still remains weak, while outside Europe there are growing problems with weakened demand from China and other emerging markets.
“Sterling’s relative strength, particularly against the euro, is an added challenge for many of our manufacturing exporters.”
Dr David Gray, joint head of finance and economics at the Lincoln Business School at Lincoln University, said: “While Eurozone growth prospects have improved recently, the weakness of the euro against the pound has made it harder for UK businesses to compete.”
The disappointing growth may also be a result of Operation Stack, which has seen transport and travel firms from Lincolnshire reportedly losing hundreds of thousands of pounds due to delays in the summer.
Phil Scarlett, president of the Spalding Area Chamber of Commerce, warned that the crisis will continue to hurt Lincolnshire businesses and consumers in the coming months.
He said: “The cost of the delays in Calais have been tremendous, with local hauliers experiencing huge delays and re-routing lorries to alternative sea ports.
“Unfortunately, the situation is still ongoing with haulier businesses continuing to lose thousands of pounds and having to bear the cost of having to work these delays into their timescales for delivery.
“This in turn will have an impact on the consumer, with shortages of certain foods and higher prices.
“However, many of the produce haulier companies in South Holland that I have been speaking to in this difficult time, still anticipate double digit growth over the next 12 months.”