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Quarterly Economic Survey - Q4 2014

Home sales remain strong, but exports struggle.

THE last Quarterly Economic Survey of businesses in 2014 carried out by the Hull & Humber Chamber of Commerce painted a picture of a general slowdown in most sectors, but there was better news on the domestic front.

Home Sales remained strong showing an increase, with the balance figure rising by 10 points to 28 which is the second strongest figure in the last two years, only being surpassed by a balance figure of 38 points in Quarter 2. More positive news came with the number of firms declaring an upturn in sales and bookings rising by 11 points.

However, exporters again suffered in the last quarter, continuing the decline we saw in the third quarter of the year, although this time around the slowdown was much less dramatic.

Firms expecting an increase in export sales again halved, while firms expecting to see a decrease rose five points and companies expecting to see some consistency rose to 63 points from 53 in the previous quarter.

There was also an increase in firms seeing consistency in sales, up nine points to 53, with a drop in the number of firms expecting their orders to increase, down to 24 points from 33 in quarter three. This saw the Export Orders balance figure drop to zero, down from 11 points in Q3 and 74 points in Q2.

The number of firms that have increased their workforce in the last three months dropped from 33% to 21%, with 65% reporting constant staffing levels — up from 57% in quarter three, while 15% of firms say their workforce has reduced, up from 10% last time, with the balance figure dropping from 23 to 6%, a 17% drop and the lowest it has been since the first quarter of the year.

Perhaps unsurprisingly then, there has also been a sizeable drop in the number of businesses expecting to take on new staff in the first three months of 2015, with just 24% saying they would look to do so, a 16 point reduction from Q3, with a slight rise in the number of firms expecting their workforce to decrease, with the overall balance figure dropping by 21 points.

Recruitment is fairly evenly split at 51% and 49%. Of the 51% recruiting staff, all are for part-time positions, but of those, 61% of those roles were permanent jobs.

Possibly reflecting the type of staff firms have been looking for, those reporting difficulties finding suitable staff dropped this quarter, but management and skilled manual jobs are still proving the most difficult vacancies to fill, which is a fairly consistent theme over the last year.

Turnover expectations for the next 12 months have also settled, with more companies expecting turnover to remain the same, with the balance figure dropping 14 points to 43. In a similar vein, profit expectations are also settling somewhat, with more firms predicting a less profitable New Year, although 63% still expect to see an improvement, which is the same number as in the last quarter.

There was a sharp increase (up 24%) in the number of companies expecting their prices to increase in the next 12 months, while those expecting consistency fell back 26% to 54 points.

Concerns over pay settlements were up slightly, as were the costs of overheads, but external concerns over interest rates had dropped, more bosses were fretting over business rates, inflation, increased competition and tax.


The Chamber’s Chief Executive, Dr Ian Kelly, says:

“We are pleased to see that home sales remain positive but are concerned about the fall in export orders.

“These figures reflect the more cautionary mood of business following talk towards the end of last year of problems in the Eurozone economy, which clearly affects our exporters. However, with the price of oil and petrol plummeting, we will wait and see if this has an overall benefit on lower costs and global growth levels versus international confidence in the future”.


Q4 2014 - Key QES results from Hull & Humber Chamber of Commerce

Sales and orders:

  • 43% of companies reported an increase in domestic sales, 11% up on the last quarter.
  • 16% reported a decrease, up 2%.
  • 31% increased their domestic orders, up 2 points. 19% reported a decrease.
  • 16% increased their export sales. 21% reported a decrease, a 5% rise on Q3.
  • 24% increased their export orders. 24% reported a decrease.

For the next 3 months:

  • 24% of companies expect to increase their workforce, down 16%. 9% expect to decrease it, up 5%.
  • 42% of companies expect to increase their prices, up 24% on the last quarter. 4% expect to decrease them, up 2%.

In the last 3 months:

  • The proportion of businesses which recruited was 51%, a decrease of 28% on Q3.
  • 23% reported an increase in cashflow and 33% a decrease, up 18%.
  • 20% increased their investment plans for plant & machinery, down 14%. 28% of respondents increased their investment plans for training, up 2%.

For the next 12 months:

  • 60% expect to increase their turnover, down 9%; 17% expect it to decrease, up 5% on the last quarter.
  • 63% expect their profitability to improve, 22% think it will worsen, up 10 points on the last quarter.


  • The cost of overheads was again the top pressure on prices (46%), followed by pay settlements (29%), raw material costs (23%) and finance (17%).
  • Inflation (50%), competition (33%), business rates (19%) and tax (19%) top businesses’ list of external concerns.

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