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Quarterly Economic Survey - Q2 2017: Home sales and orders climb as exports ebb

HOME Sales and Orders both climbed further into positive territory during the second quarter of the year, according to the latest Economic Survey results.

Research by the Hull & Humber Chamber of Commerce reveals that eight per cent more firms said that their order books had increased, with the balance figure rising by six points.

Home orders were also on the up overall, with the balance figure rising a further four points higher than in the first quarter of the year.

It was a different story for Export Sales and Orders this time around. Both sectors reported strong increases during the first quarter of the year, but these have now fallen back, with the balance figure dropping nine points to 29, with Export Orders dropping back five points, although both sectors are still much stronger than they were for most of the previous year.

Perhaps unsurprisingly set against a Brexit backdrop, businesses’ biggest concerns last quarter were exchange rates (up 10 points on Q1) and inflation (up a further seven points on the first quarter). Fears over increased competition and tax were also a concern to business leaders in the Humber, while concerns over a hike in interest rates continued to recede.

Concerns over pay settlements also rose slightly, up by one per cent, but raw material and finance pressures ebbed away a bit in this quarter of the year.

Turnover and profit expectations also took a hit in Quarter Two. The balance figure for Turnover Expectations for the next three months fell 27 points this time around, but was still ahead of the last two quarters of 2016.

Fewer firms said they expected to see their profits increase in the next three months, with the balance figure falling back a modest three points, but again, was more positive than in the last six months of 2016.

More companies said they were planning to invest in Plant and Machinery in the next three months, with the balance figure rising by 14 points, but remaining in negative territory.

Plans to invest in training in the next three months was a mixed picture. Nine per cent of firms said they would increase their investment, while 11 per cent of respondents said they would cut back on plans, but the balance figure saw only a slight reduction of two points.

Fewer firms said they were considering recruiting new staff in the next three months, with the balance figure dropping seven points, to 11.

In recruitment, skilled manual workers were proving to be the hardest to find this quarter, while clerical staff were also proving more difficult to source.

The management and unskilled sectors also saw an increase in firms expressing difficulty in filling vacancies with suitable candidates.

The number of firms which said they were working at full capacity, was also down nine per cent this quarter.

Commenting on the report, Chamber Chief Executive, Dr Ian Kelly, said: “It was good to see the domestic sales and orders sector recovering slightly this quarter, even though the exports sector has fallen back after showing a surge in the first part of the year.

“In the Humber the export sector is still stronger than it was for most of last year, so despite dropping back a touch this quarter, things are still looking encouragingly strong.

“Concerns over exchange rates, inflation and interest rates are to be expected at this time, but we hope businesses will continue to do what they do best, and it is encouraging to see many companies still planning to invest in new equipment and training in the coming months”.

DOWNLOAD THE FULL REPORT:

QES Q2 2017

Alan Boswell Insurance Brokers
On Line Design Engineering Group Ltd
Together
Ellgia
ASM Global
Andrew Jackson Solicitors LLP
Orsted
Double Tree by Hilton Forest Pines Hotel & Golf Resort
KCOM
Arco
Streets Chartered Accountants
We are My
SPS Group
Clugston
Hull News and Pictures
Associated British Ports
University of Hull
Wilkin Chapman LLP