QES Q1 2026 - Challenges continue in Q1, but cashflow shows improvements
THE first quarter of 2026 showed that many businesses in the Humber were still facing plenty of challenges, with Export Orders being one of the few bright spots.
That figure rose by 25 points but the balance figure remained in negative territory, as did the figure for Export Sales which fell further, another eight points, hitting –50.
Home Sales and Home Orders were also both down at the start of the year with Home Sales dropping a further 12 points into negative territory and Home Orders almost mirroring that drop, falling 11 points to show a balance figure of –46.
Cashflow was another of those scarce bright spots in this quarter’s survey, with firms reporting a 12 point boost, compared to the last quarter of 2025.
Most of the other markers were down in the first quarter of the year to a greater or lesser degree with turnover expectations taking one of the biggest hits, perhaps reflecting the concern there is among Humber businesses about the current state and outlook for the local and national economy.
Profit expectations were down by two points to –37, while 48% of businesses said they were working at full capacity.
Prices were also on the up with more than 50% of firms saying they were expecting to increase their prices in the next three months.
Looking at staffing, only a third of businesses reported that they had been trying to recruit new staff in the last quarter, with 27% fewer full time roles in the mix, although there was an increase of 18% in full-time vacancies. Part-time positions fell slightly on the previous quarter, down four points to 25. Temporary jobs were up 1% on the last quarter with a balance figure of 25.
Employers’ biggest search was for clerical staff, with an increase of 30%, while management roles were also available, up 15% on the previous quarter at 48. Skilled manual roles fell by 6% on last quarter, unskilled or semi-skilled positions saw a slight increase, climbing by eight points to 47.
Investment in Training was down by five points to a balance figure of –40, while investment in plant and machinery in Q1 fell further into negative territory, dropping five points to –40.
Employment in the last three months saw a fall of 13 points to a balance figure of –34, while expected employment for the next three months saw a modest 1% uplift, taking the balance figure up to –18.
Rising overheads were the biggest price pressures for businesses this quarter with energy costs no doubt figuring strongly in the mix, with raw material costs also a big worry for Humber firms.
Pay settlements and finance costs held their ground with with no change from the last quarter.
External concerns saw competition fears rise substantially by 17 points on the last quarter and inflationary pressures also weighing heavily on the minds of company bosses.
Business rates were also a concern, while interest and exchange rates were less of a concern, although rising taxes and employer costs also featured in this quarter’s report.
Chamber Chief Executive, Dr Ian Kelly, commented: ““The national economy was just starting to show glimmers of buoyancy before the latest crisis in the Gulf got underway giving rise to more uncertainty for businesses in the Humber.
“With supply chains once again being disrupted, there are now fears of shortages in the shops and an increasing number of business failures as the risk of rising inflation and interest rates raises its head once again.
“These are further challenges for businesses already trying to cope with rising energy costs and the double whammy of minimum wage and National Insurance costs which came into force in April.
“The outlook for businesses in the Humber remains challenging, and the full impact of the Gulf effect still remains to be seen.”
Director General of the British Chambers of Commerce, Shevaun Haviland, said: “Even before the latest escalation in the Middle East, business sentiment remained fragile and stuck in a low-growth phase.
“Most SMEs continue to report no improvement in key indicators such as investment and cash flow. Sentiment remains largely unchanged since the 2024 Budget, which saw a permanent increase in the labour cost base for firms.
“Businesses face a fresh wave of employer costs and burdens from this month causing more pressure and uncertainty.
“But the Iran conflict is now the major factor that could derail fragile progress. We are already seeing early impacts, with firms reporting rising energy and shipping costs, echoing the initial stages of previous global shocks.
“De-escalation is the only way to prevent a deeper economic crisis. As energy costs rise the government should keep all options on the table to help businesses. Bringing forward and extending the scope of the BICS (British Industrial Competitiveness Scheme) would be a strong step, alongside reconsidering how renewable levies on business energy bills are paid.”
