QES Q3 2026 - Business takes a cautionary stance as cost pressures continue to build in Humber
WITH the Bank of England widely expected to raise interest rates from 3.75% by at least a quarter of one percent at its next Monetary Policy Committee meeting, and with fears of rising inflation, it’s hardly surprising that Humber businesses are striking a cautionary note.
Our Quarter 3 Economic Survey results show most indicators are subdued, although one or two bright spots did lighten the gloom.
Employment figures were one of the few bright spots in these results, with 16% more firms having tried to recruit staff in the last three months.
To add to this bit of positivity, the number of employers expecting to recruit staff in the next three months was also up by 31 points, while the number of firms looking for new staff was more than 80 per cent of respondents.
There was a rise in part-time vacancies with 20 per cent of firms saying they were looking to recruit, while there was a corresponding drop in the number of full-time roles.
Those firms looking for permanent roles stayed the same as in the second quarter’s results at 20 per cent.
More firms were looking for skilled manual roles this quarter, while there was also a rise in manual jobs, although clerical roles were less in demand.
The other bright spot in Quarter 3 were the export figures, with a rise in both Sales and Orders of 29 per cent.
Home Orders and Sales didn’t fare quite so well with their balance figures heading in the opposite direction.
The balance figure for Home Sales was down 17 points to –25, while the figure for Home Orders was down 16 points at –16 to 41 points.
Cashflow in the last three months also took a hit and was down 31 points at –31.
More firms reported that they were looking to increase their prices in the next three months as costs for businesses continue to rise.
Alongside that, looking ahead to the next 12 months, turnover expectations were down 8 points to –15.
Perhaps unsurprisingly, profit expectations were also down for the next 12 months, dropping another 7 points to –15.
Fewer than a quarter of firms said they were working at full capacity with 77 per cent of businesses indicating they could take on more work.
The biggest pressure on prices had been raw material costs, closely followed by finance and other overheads, while pay settlements weren’t so much of an issue this quarter.
Competition was also more of a concern in Quarter 3, up 8 points while tax was less of an issue, dropping 16 points to 46.
Interest rates and Exchange rates were up 31 and 30 percent respectively, while finance costs were also on the rise.
David Hooper, the Chamber’s Managing Director, said: “This survey reinforces what we have been hearing at our Area Councils — many businesses are continuing to find trading conditions challenging, and with an interest rate increase on the horizon, that is likely to remain the case.
“Employment figures were one of the few bright spots in these results, with 16% more firms having tried to recruit staff in the last three months, and a similar rise in the number of firms planning to recruit in the coming months.
Exports also seemed to be enjoying a busy period with the sales and orders figures both up.
“Cashflow was proving challenging for more firms, and turnover was also down this quarter, with a corresponding drop in profits predicted for coming year.”
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Shevaun Haviland, the BCC’s Director General, said: “The QES points to an economy stuck in low gear. Most firms are reporting no improvement across almost every indicator we track.
"It's a positive that the decline of the preceding quarters hasn't continued, and turnover confidence has seen a slight bounce. But the underlying trend still points to flatlining, with just 17% of firms increasing their investment, a post-pandemic low.
"There is also a big imbalance beneath the headline. Larger firms are driving any improvements to indicators, while the smallest businesses have seen sales and cash flow fall further. Hospitality remains the sector under the most pressure.
"Firms are being held back by two constraints. Global volatility is driving up prices and pushing firms to defer investment decisions, while the underlying cost base continues to rise, particularly around employment.”
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