Quarterly Economic Survey Q3 2018: Humber businesses bucking national trend
THE Chamber’s economic survey results for the third quarter of 2018 reveal a slight uplift in the domestic and export sectors, but recruitment difficulties are still an issue for our businesses.
Research by the Hull & Humber Chamber of Commerce shows that domestic sales and orders both increased slightly, with the balance figure for Home Sales rising 10 points to 25 and Home Orders rising by eight points to 28.
The export sector also showed a slight increase, reflecting perhaps our busy Humber ports, with Export Sales rising by seven points to 27 and export orders rising by 18 points to 38.
A third more firms than in the second quarter of the year said they had tried to recruit staff in Quarter 3, while fewer firms said they were planning to recruit staff in the next three months in the run up to Christmas, with only four per cent of companies looking for extra staff.
Of those who did recruit staff, 45 per cent of firms said they were for temporary positions, with fewer full time roles than in the last quarter too, down to 75 points.
Only 35 per cent of firms were looking for permanent staff and 20 per cent (8 points less than in the previous quarter) were looking for part time employees. Overall the sector was down by six points.
However recruitment difficulties are still an issue in the Humber, with more firms saying they were having issues sourcing staff with relevant skills. Skilled manual workers were the hardest to find, followed by management and clerical staff.
Cashflow was up on the last quarter, with a balance figure of 25, and despite the uncertainty, some businesses were still looking to invest in new plant and machinery, with 12 per cent more businesses looking to spend on new equipment.
The same couldn’t be said for training however, with a nine point drop in the number of firms planning to invest in training their staff in the next three months.
Turnover expectations also took a hit, dropping by nine points this quarter to 43, down from 52 in quarter two. However, profit expectations rose slightly to a balance figure of 50 points.
Almost 60 per cent of firms now say they are working below their capacity.
A majority of firms, 58 per cent, said they expect to see their prices remaining steady in the next three months, with fewer firms expecting to see an increase, however, the balance figure dropped by 10 points to 42.
Raw material costs were the biggest pressure on prices for businesses, followed by pay settlements and other overheads.
Competition, exchange rates, business rates and interest rates were all external concerns for companies, while business rates and tax were less of an issue this time around.
Chamber Chief Executive, Dr Ian Kelly, said: “It is good to see our Humber economy is faring slightly better than the national picture, however there are still clear concerns for businesses as they try to plan for the future.
“We are hoping that the Chancellor will make some positive gestures in the Budget to help reassure business that the Government is supporting our endeavours through investment in transport infrastructure and regeneration.
“Our survey shows that two-thirds of businesses are working below capacity in our region, and that has to be a concern for the local economy, but this is balanced off by some positive indicators which reveal that while things are tough out there, home sales and orders and the export sector are holding their own which creates some room for optimism”.
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