QES Q1 2024 - Few economic bright spots as many challenges persist for Humber firms
WITH a continuing lack of clarity on possible interest rate cuts, businesses are still hoping for positive news, but since this report was compiled, both house prices and energy prices have dropped, raising hopes that we will soon see a cut.
Our latest survey, conducted between 12th February and 12th March, revealed that Home Sales dropped further this quarter, dropping another 10 points to –36, while Home Orders fared slightly better, dropping five points to –42.
Exports continued their steady recovery this quarter with the balance figure for Export Sales increasing by 12 points, but remaining in negative territory at –38.
Export Orders did slightly better still, increasing by 15 points to –31.
However, Employment took a tumble, with the number of firms saying they had tried to recruit staff in the last three months dropping by 18 points to –22.
Expected Employment for the next three months increased slightly, up by two points to 9.
More firms reported that they had tried to recruit staff in the last three months, up by 10 points from 49 to 59%. Most of those who had tried to recruit were hoping to fill full-time positions, with more of those positions being for permanent roles this quarter.
There was a slight decrease in the number of firms looking to recruit part-time staff, down two points to 27.
The number of temporary jobs also increased by 1 point, up to 91.
Fewer firms reported difficulties in recruiting the right kind of staff, down by 5 points to 77. The kind of roles firms were trying to fill varies, but the biggest jump this quarter was Unskilled and Semi-Skilled jobs which were up 13 points at 30.
Management positions also saw a sizeable increase, up 16 points to a balance figure of 60 this quarter.
Cashflow in the last three months was a on the up, but still in negative territory with the balance figure improving to –19.
Raw material and finance costs were both down this quarter, while pay settlements and other overheads all increased marginally.
The biggest external concerns were Competition and Inflation this quarter, although interest rates were still a worry.
Investment in Plant and Machinery was also down considerably, dropping 18 points to –22. Investment in training was also down, dropping another 7 points to a balance of -14.
Profit Expectations for the next 12 months were also down by three points to a balance figure of –14, but in better news, Turnover Expectations saw a healthy increase, clinging by 8 points to a balance figure of 14.
More firms expected to see their prices rise in the coming months, too, with the balance figure rising by two points to +2.
Only 23% of firms said they were working at full capacity this quarter, indicating that the business is still in the doldrums, to some degree.
The Chamber’s External Affairs Director, David Hooper, said: “Raw material and finance costs were both down slightly this quarter, but there doesn’t seem to be much respite for businesses from the challenging trading conditions which continue to test many local firms.
“Exports improved marginally, but home sales and orders struggled again this quarter and there seems to be little appetite for firms to invest in training or new equipment, as many continue to focus on making ends meet.
“Looking ahead, most firms expect to see their prices rise in the coming months and more firms are worried about competition and inflation, so any help the Bank of England might be able to offer by way of an interest rate cut soon, will no doubt, be welcomed.”
