Quarterly Economic Survey - Q1 2014
First quarter results reveal management and skilled manual jobs are hardest to fill.
With the announcement at the end of March that Siemens is finally committing to the Humber region for the long-term, the employment and recruitment figures in the latest Quarterly Economic Survey make interesting reading.
The long-awaited announcement was welcomed across the area and will undoubtedly provide a boost in both direct jobs (around 1,000), in addition to stimulating work for the multitude of supply chain companies which are set to benefit and this in turn will provide a ripple effect into the wider economy of the Humber region.
On the jobs front, the latest research conducted by Hull & Humber Chamber of Commerce, reveals that 33% of firms who responded to the survey reported difficulties in filling management vacancies and a further 23% had difficulties filling skilled manual positions, although the trend seen in the last quarter’s results of the availability of more full time permanent positions being advertised, seems to be continuing, which is clearly positive news.
The balance figure for expected employment in the next three months rose six points, to 25 compared to the last quarter of 2013.
In the last few surveys, imports and exports have performed very strongly, but in the last quarter, this now appears to have steadied somewhat, with a slight drop compared to the last two quarters, yet despite this, the sector is still performing strongly when compared to 2012 and the early part of 2013.
Unusually, both balance figures are the same at 67, having dropped by varying increments, but remain broadly similar to the figures reported in the previous year’s surveys.
Similarly, home sales and orders also reported broadly similar figures to previous quarters, showing a level of stability and predictability. The home sales balance figure fell back four points to 21, while the home orders figure went in the opposite direction, rising by six points to 26.
The prices balance has risen steadily and consistently over the last four quarters, and shows a seven point increase this time around.
Pay settlements, raw material costs and other overheads are the biggest concerns for businesses this quarter, while the top external concerns are inflation, exchange rates, business rates and competition.
Only 35% of firms say they are working at full capacity, that’s 4% fewer than in the last quarter’s results, and a marked difference from the 62% figure from the second quarter of last year.
More firms expected their cashflow to decrease in the next three months, but those firms expecting it to remain constant was only 1% down on the last quarter at 46%.
Firms expecting to invest in plant and machinery equipment also saw a slight decline in this survey, with the balance figure dropping by eight points to 21. However, the number of firms expecting their investment to remain constant was fairly consistent with the last two quarters, at 58%, a 3% improvement on the last set of results.
Investment in training also took something of a hit, with the balance figure dropping eight points when compared to the previous quarter, but at 21, is still substantially better than the figure of 13 in Quarter 3 of last year.
The Chamber’s Chief Executive, Dr Ian Kelly, says:
“After a final flourish at the end of last year, the survey results for the first quarter of this year seem to paint a picture of “steady as she goes”.
“With no dramatic changes in any particular area, the Chamber feels that the steady climb out of recession is continuing, and the fact that it appears to be progressing at a steadier pace is perhaps a good thing, as quite often, more companies tend to struggle with cashflow coming out of a recession than they doing going into one.
“The Q1 survey indicates that recruiting candidates for managerial posts is proving to be quite difficult in this area, and skilled manual vacancies are also proving problematic, which is something of a concern, especially when you consider the need for engineers to meet the demand that the Siemens’ investment in the Humber region is expected to lead to.”
The Chamber’s Chief Executive, Dr Ian Kelly, says:
“After a final flourish at the end of last year, the survey results for the first quarter of this year seem to paint a picture of “steady as she goes”.
“With no dramatic changes in any particular area, the Chamber feels that the steady climb out of recession is continuing, and the fact that it appears to be progressing at a steadier pace is perhaps a good thing, as quite often, more companies tend to struggle with cashflow coming out of a recession than they doing going into one.
“The Q1 survey indicates that recruiting candidates for managerial posts is proving to be quite difficult in this area, and skilled manual vacancies are also proving problematic, which is something of a concern, especially when you consider the need for engineers to meet the demand that the Siemens’ investment in the Humber region is expected to lead to.”
Q1 2014 - Key QES results from Hull & Humber Chamber of Commerce
Sales and orders:
- 46% of companies reported an increase in domestic sales, 1% down on the last quarter.
- 25% reported a decrease, up 3%.
- 47% increased their domestic orders, the same number as last quarter. 21% reported a decrease.
- 73% increased their export sales, down 5%. 6% reported a decrease, a 2% drop on Q3.
- 80% increased their export orders, up 9% on Q2. 4% reported a decrease.
For the next 3 months: - 30% of companies expect to increase their workforce, up 3%. 5% expect to decrease it, down 3%.
- 30% companies expect to increase their prices, up 5% on the last quarter. 4% expect to decrease them, down 2%.
In the last 3 months:
- The proportion of businesses which recruited was 54%, an decrease of 13% on Q4.
- 25% reported an increase in cashflow, an decrease of 2% on Q4, and 30% a decrease, up 5%.
- 32% increased their investment plans for plant & machinery, down 5%. 32% increased their investment plans for training, down 5%.
For the next 12 months:
- 63% expect to increase their turnover, a 4% decrease on Q4; 18% expect it to decrease, a 10% rise on the last quarter.
- 43% expect their profitability to improve, up 7%, 23% think it will worsen, up 1% on last quarter.
Pressures:
- The cost of overheads was again the top pressure on prices at (46%), followed by raw material costs and pay settlements, both at (21%).
- Inflation (44%), competition (14%), business rates (12%) and tax (11%) top businesses’ list of external concerns.
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