Quarterly Economic Survey - Q2 2013
Survey of Humber region businesses shows economic recovery is strengthening - that is the clear picture from the results of the Hull & Humber Chamber of Commerce’s second Quarterly Economic Survey of the year.
THE local recovery in the Humber region is gathering pace! That is the clear picture from the results of the Hull & Humber Chamber of Commerce’s second Quarterly Economic Survey of the year.
Sales orders, training, turnover and profit expectations have all shown sharp increases, while exports continue to perform very well, with export sales and orders both climbing steadily over the last six months.
The number of companies reporting that they are working at full capacity has also more than doubled, with 62% of firms saying they’re now working flat out — the highest figure recorded since 2001.
Training has increased by 19 points on the previous quarter, and with 21% of firms saying they are investing in training which is the strongest figure since the second quarter of 2007.
Turnover expectations are also showing a marked increase, with a 19% rise in the first quarter of the year, with the figures having held steady at that level for most of 2012, which clearly shows businesses are getting busier as confidence improves.
With profit expectations also showing a big jump, up 38 points on the last quarter, which in turn was up 6 points on the final quarter of 2012, firms are demonstrating a renewed confidence.
Cashflow has also shown a marked improvement, returning to positive territory for the first time in a year, representing a 25% reported increase.
On the home front, sales have doubled compared to the first quarter of the year, up 6%, but are still eight points adrift of last year’s final quarter.
Home orders are also holding steady, maintaining their recovery after spending the entirety of last year in negative territory.
The employment figures in the Humber region also make interesting reading this quarter, with 68% of firms saying they are planning to recruit new staff
However, nearly all of the vacancies were for part-time staff, although 81% of those were for permanent positions. Filling management and technical positions is still proving challenging, with 46% of companies reporting difficulties in these areas.
Prices have remained stable in the last quarter, as have concerns over pay settlements, but more companies are also worried about a rise in inflation.
Conversely, interest rate fears have dropped by more than half and concerns over competition have also shown a sharp drop, down by 20 points on the previous quarter and are now at the lowest point for more than a year.
The Chamber’s Chief Executive, Dr Ian Kelly, comments:
““It is encouraging to see such a positive set of results from the second quarter’s survey, but there are still some concerns.
“The export figures are strong and are continuing to perform very well, with sales and orders both climbing steadily over the last six months, reflected by the increase in the number of documents our International Trade Centre is processing.
“With sales orders, training, turnover and profit expectations all showing increases there’s a lot to be positive about, but we need to keep an eye on our domestic inflation which has increased again.”
Q2 2013 - Key QES results from Hull & Humber Chamber of Commerce
From Hull & Humber Chamber of Commerce
Sales and orders:
- 39% of companies reported an increase in domestic sales, the same as in Q1 of this year. 27% reported a decrease, down 6%.
- 44% increased their domestic orders, up 6% on Q1. 23% reported a decrease.
- 68% increased their export sales, up 3%. 4% reported a decrease, a 6% drop on Q1.
- 68% increased their export orders, down 1% on Q1. 4% reported a decrease.
For the next 3 months:
- 28% of companies expect to increase their workforce, up 2%. 11% expect to decrease it, down 5%.
- 10% of companies expect to increase their prices, down 20%. 10% expect to decrease them, down 1%.
In the last 3 months:
- The proportion of businesses which recruited was 68%, an increase of 14% on Q1.
- 26% reported an increase in cashflow, an increase of 6% on Q1, and 21% a decrease, down 19%.
- 21% increased their investment plans for plant & machinery, up 1%. 30% increased their investment plans for training, up 11%.
For the next 12 months:
- 59% expect to increase their turnover, an 8% increase on Q4 last year and Q1 of this year; 9% expect it to decrease, an 11% improvement on the last quarter.
- 62% expect their profitability to improve, up 14%, while there was a big drop in those who expect it to worsen, down 24% to 6%.
Pressures:
- The cost of overheads remained the top pressure on prices (19%), followed by pay settlements (17%).
- Inflation (50%), competition (17%), business rates (18%) and tax (10%) top businesses’ list of external concerns.
