Quarterly Economic Survey - Q3 2013
EMPLOYMENT and exports are the headline acts in the Hull & Humber Chamber of Commerce’s economic survey for the third quarter of 2013.
Reinforcing the positive picture painted by the second quarter’s results, 25% of firms increased their workforce in the last three months and importantly, fewer firms reduced their staffing levels. This is the second successive quarter which has shown an improving picture.
Further encouraging news comes from more than 30% of firms surveyed which say they are expecting to recruit in the next three months, with 63% having tried to increase their workforce in the last three months.
There has also been a sharp change in the last quarter on the types of vacancies, with 78% of available positions being full time and more than half of those (56%) being permanent jobs, which is good news for the region.
While fewer firms are reporting difficulties in finding the right calibre of staff, skilled manual workers are currently the hardest to find for 18% of companies, with another 15% of firms having trouble finding suitable management staff.
The number of companies investing in training has risen for the third quarter in a row, with the balance for the last three months up 6% this time around.
With 75% of firms reporting an increase in export sales and only 2% reporting a decline, the balance figure again rose 9 points this quarter, matching the same increase in the second quarter.
There was further good news on export orders, with over 70% of firms reporting an increase. This, combined with an increase in the number of firms reporting an increase in their order books, means there has been a 5% rise in the balance figures since the last quarter of 2012.
The home market hasn’t been quite so buoyant, but home sales balance has still doubled for the second quarter in a row, with 41% of firms reporting an increase in sales.
The balance figure for home orders fell back slightly to 15%, a drop of 6 points.
Turnover and profit expectations were down in this quarter, with fewer firms working at full capacity, although two-thirds of companies expected price pressures to remain at fairly constant levels.
The biggest external concerns were reported to be interest and exchange rates, which have returned to previous levels after dropping in the previous quarter.
And while 6% more firms say they are planning to invest in plant and machinery, the balance figure has dropped 7 points on the last quarter, due to more firms trimming their investment plans.
The Chamber’s Chief Executive, Dr Ian Kelly, says:
“These third quarter results are another strong performance from the Humber region’s businesses.
“It’s good to see that our exporters are continuing to thrive, having improved their performance quarter on quarter with sales and orders continuing to climb, and continuing to keep the Chamber’s International Trade Centre busy.
“The employment figures are also encouraging, but this area, of course, still has serious long-term unemployment issues to address despite 25% of firms in the Humber region taking on new staff in the last three months.
“We are still hopeful for substantial growth in the renewables sector and we need to make sure that our workforce is ready to step up and take advantage of these new opportunities as and when they arise.
“However, with some evidence of a drop in turnover and profit expectations, fewer companies working at full capacity and with concerns about interest and exchange rates, we still need to keep a watching brief on the progress our economy is making – it is not boom times yet”.
Q3 2013 - Key QES results from Hull & Humber Chamber of Commerce
Sales and orders:
- 41% of companies reported an increase in domestic sales, 6% up on the last quarter. 17% reported a decrease, down 10%.
- 37% increased their domestic orders, down 7% on Q2. 22% reported a decrease.
- 75% increased their export sales, up 7%. 2% reported a decrease, a 2% drop on Q2.
- 71% increased their export orders, down 2% on Q2. 2% reported a decrease.
For the next 3 months:
- 31% of companies expect to increase their workforce, up 3%. 9% expect to decrease it, down 2%.
- 25% companies expect to increase their prices, up 15%. 14% expect to decrease them, up 4%.
In the last 3 months:
- The proportion of businesses which recruited was 63%, a decrease of 5% on Q2.
- 20% reported an increase in cashflow, a decrease of 6% on Q2, and 27% a decrease, up 6%.
- 27% increased their investment plans for plant & machinery, up 6%. 35% increased their investment plans for training, up 5%.
For the next 12 months:
- 53% expect to increase their turnover, a 6% decrease on Q2; 18% expect it to decrease, an 9% increase on the last quarter.
- 46% expect their profitability to improve, down 16%, 27% think it will worsen, up from 6% last quarter.
Pressures:
- The cost of overheads remained the top pressure on prices (48%), followed by raw material costs (36%).
- Inflation (44%), competition (22%), business rates (22%) and tax (22%) top businesses’ list of external concerns.
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