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QES Q4 2021 - Humber firms fear inflationary pressures as New Year begins

THE Quarter 3 results saw Humber business pull back from the enthusiasm seen as we came out of lockdown in mid 2021, but as we moved towards the end of the year and facing new challenges around Covid-19, how were companies coping?

Research by the Hull & Humber Chamber of Commerce has revealed that while the domestic scene was still challenging, imports and exports had improved slightly.

However, there was increasing concern about the outlook for 2022, with external concerns focused around rising interest rates, inflation and competition.

Pressure on prices were also on the up, with the biggest concerns among firms being increasing overheads.

As the cost of living increases pay settlements were a greater concern in this survey’s results for employers, and more businesses said they were concerned about accessing finance, but the cost of raw materials was less of a concern in this quarter.

The Chamber’s External Affairs Director, David Hooper, said: “These results for Quarter 4 of 2021 clearly demonstrate the concerns felt by Humber businesses as inflationary pressures take a firm hold.

High fuel prices, rising energy prices, and the first increase in the interest rate for 10 years all add to the burden of business already struggling to recover from the pandemic.

The New Year is certainly going to be a challenging one for many, as they struggle to plan ahead with the added uncertainty around the continuing Covid-19 crisis which is currently leading to staff absences and sickness.

“Hopefully, as we move towards Spring, things may begin to improve on at least some of these fronts”.

“To help its members as much as possible, the Chamber has invested in its membership offer which now includes five new advice lines covering HR, H&S, Legal, Tax and VAT issues.

“These are employer focused services backed up by unlimited access to experienced advisors and access to a library of 800 documents and templates for things like employment issues, redundancy or H&S requirements around Covid-19, risk assessments, H&S policies etc. Click here for more information.

The Quarter 4 Survey also revealed that Home Sales were down 11 points to 17, while Home Orders also dropped this quarter, down 15 points to 9 points.

Exporters were having a slightly better quarter and businesses became more used to the new trading arrangements, with the Export Sales balance figure up 29 points and back in positive territory, while the balance figure for Export Orders also returned to positive territory at 11 points, a rise of 18 points.

Employment in the last three months was fairly steady with a balance figure of 0, while the number of firms expecting to hire new staff in the next three months rose from 24 points to 36.

Full-time permanent jobs were the most difficult to find suitable candidates for, with managerial and clerical roles proving to be the most difficult to fill. There was less demand for part-time or temporary employees this quarter.

More businesses were looking to invest  in training which was up two points to 15, while investment in Plant and Machinery dropped slightly.

Turnover and profit expectations for the coming months were also well down this quarter, with turnover expectations dropping by 12 points to 24.

Profit Expectations also took a tumble, dropping by 20 points down to a balance figure of 2 as the more difficult market conditions continued to take their toll on Humber businesses.

Cashflow, however, fared slightly better, rising by 11 points to a balance figure of 8 points.

With only 37 per cent of firms reporting that they were working at full capacity, it was a clear signal that many businesses are just ticking over at the moment and hoping for a better 2022.

As the New Year unfolds, it is apparent businesses are facing many challenges and are concerned about the inflationary pressures as costs rise across the board.

 Click here to download the full report.

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