QES Q2 2020: Times Like These pile pressure on our economy as Chamber urges businesses and consumers to ‘buy local’ and support Humber firms
THIS is the Chamber’s first Quarterly Economic Survey since Covid-19 put the world on pause back in March, and while the domestic market took a big hit, the export sector fared rather better, and the results show there is some optimism for the year ahead, despite three months of enforced lockdown.
The Quarter 2 survey was conducted between May 18 and June 8 while most people were under orders to stay at home, online shopping became the new normal for many, and the doors of the leisure industry were firmly closed.
In “Times Like These”, unsurprisingly, the domestic market took a tumble with Homes Sales and Home Orders both showing big falls, with the former down 40 points and the latter recording a 37-point drop.
Our exporters fared somewhat better, with the sales and orders figures only dropping a comparatively modest nine points, with many people involved in that industry considered to be essential workers.
Hull & Humber Chamber of Commerce Chief Executive, Dr Ian Kelly, said: “The Covid-19 crisis has clearly had a profound effect on the Humber economy with our city and town centres taking the brunt of the lockdown.
“While we hope the Government will do its bit to reboot our economic confidence, every one of us can play our part by supporting our local businesses and traders, be they a little corner coffee shop, a fish man in his van, or a multi-national manufacturer or supplier.
“If we buy local and support our own business communities, we can all help each other to get our businesses and our economy back on its feet as quickly as possible and minimise the pain of job losses and redundancies which many fear as the furlough scheme is wound down in the next few weeks.
“Our message is buy local, support our local traders, and let’s all help to rebuild the Humber’s economy”.
With many business closed, maybe it’s no surprise that Cashflow in the last three months was also down to its lowest level in the last two years, with the balance figure dropping a further 16 points to –38.
Employment in the last three months was also down sharply, with more firms decreasing their staffing levels with the balance figure dropping from 12 points in the first quarter of the year to –23 this time around.
Recruitment in the last three months was largely on hold, with 81% of firms reporting that they hadn’t tried to hire new staff, and it didn’t look much brighter for jobseekers in the next three months, with fewer firms thinking of taking on new members of staff, the balance figure dropping 14 points to –9.
Of those businesses which did attempt to recruit staff, skilled manual workers were the most difficult to find, while management roles, clerical staff and unskilled workers were in notably less demand this quarter.
Looking ahead, fewer firms were planning to invest in plant and machinery in the next three months, and there was a big drop in the number of businesses investing in training with the balance figure dropping 37 points into negative territory.
Prices also fell sharply, with far fewer firms expecting their prices to stay the same and a notable increase in the number of businesses expecting to see their prices fall, tumbling from 63 points in Quarter 1, to –4, giving a balance figure of –67.
Looking at the next 12 months, while turnover expectations were down 30 points, at –37, profit expectations were a bit more optimistic, with the balance figure only dropping three points to –24.
The biggest price pressures on firms in Quarter 2 raw material costs and other overheads, while inflation and tax with the biggest external concerns.