Quarterly Economic Survey - Q1 2017: Humber businesses putting the international ‘power’ into Northern Powerhouse
INTERNATIONAL trade saw the biggest turn-around in fortunes in the first quarter of 2017 with both sales and orders showing improvements.
The number of companies reporting an increase in international sales jumped 29% over the last quarter which in turn saw the balance figure jump from –5 in quarter four of 2016, to 38 points this time around, a change of 43 points.
Similarly, firms reporting a rise in international orders jumped by a third, with the balance figure showing a change of 33 points compared to the last quarter.
Home sales also performed strongly in the first quarter, with the balance figure rising by 10 points to 14, while Home Orders fell back slightly, with the number of firms reporting an increase in orders dropping by five points. However, the balance figure only fell by two points.
There was also encouraging news on the employment front, with 29 per cent of firms reporting an increase in their workforce over the last three months, up 16% on the last quarter, with the balance figure for this sector rising by 12 points.
Firms planning to increase their staffing levels over the next three months was also up, rising by 8%, with the balance figure rising by 10 points to 18.
More firms have recruited staff in the last three months too, however there were fewer permanent positions on offer and slightly fewer full time roles. The survey also showed a rise in part-time temporary jobs.
Pointing to the well-documented skills shortage in the Humber, there was an increase in the number of firms reporting difficulties in recruiting suitable staff this quarter.
Cashflow in the last three months seems to have held its ground, with the balance figure improving by just two points compared to the previous quarter.
There was a drop in the number of firms planning to invest in new plant, machinery, or equipment, with the balance figure dropping five points to –20, however, there was more positive news on the training front, with more firms planning to invest in staff training (up 6 points) which saw the balance figure recover strongly from negative territory in the last survey at –17 to 5 points this time around, a swing of 23 points.
Looking at the year ahead, 12% more firms are expecting their turnover to increase and there was a similar rise in the number of firms who expected to see a rise in their profits in the next 12 months.
There was a slight increase (4%) in firms reporting that they are working at full capacity, while there appears to be good news on the prices front, with a stable picture.
Raw material costs and pay settlements were causing the greatest pressure on prices, while business rates and competition were the main focus of external concerns, with inflation and exchange rates also proving to be a concern to businesses in our region.
Access to finance was slightly easier this time around, although there was a slight increase in the number of companies highlighting concerns on the cost of other overheads.
Commenting on the report, Chamber Chief Executive Dr Ian Kelly said: “Businesses in the Humber are determined to use the benefits of offshore renewables growth and Hull City of Culture 2017 to make the Humber the “power” in the Northern Powerhouse.
“So it is pleasing to see international trade making good progress in the Humber in the first quarter of 2017, as businesses simply get on with what they do best.
“The domestic market is a little quieter, but with recruitment performing well, and turnover and profit expectations adopting a positive stance, 2017 has got off to a solid start.
“We hope the local economy’s good progress in Q1 continues in the coming months as we face up to a General Election and helps to create more jobs and prosperity in the Humber”.
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