Member Article

67% Humber firms expecting turnover increase

The final Quarterly Economic Survey of 2013 revealed 67% of Humber firms are expecting an increase in turnover, with strong export orders and sales.

The research, conducted by Hull & Humber Chamber of Commerce follows the City of Culture win las year and the Able Marine Energy Park announcement in December, and suggests a “positive atmosphere in the region.”

Export sales and orders were both very strong again this quarter, rising to their highest levels since the survey began, with 78% of companies reporting a rise in export sales, 3% up on the Quarter 3 figure and consolidating the steady increase throughout 2013.

Export orders also performed impressively, with 80% of firms reporting an increase, again reaching the highest level since the survey began and recording a 9% increase on Quarter 3.

Firms expecting their turnover to increase in the coming months hit 67%, up from 53% in Q3 and 59% in Q2, making it the best result in this category for a couple of years, with the balance figure rising by 24 points on Q3 and nine points on Q2.

More firms expected their profits to remain the same at 35% than in the previous few quarters, but the balance still managed to show a 2 point rise.

Home sales increased this quarter by 6%, with home orders increasing 10% to its highest level since the survey began, beating Quarter 2’s 44% by a further 3% at 47%.

Employment prospects remained constant for 67% of firms, but the balance figure fell back two points on Quarter 3 but is still 3% better than the figures for the first two quarters. Expected employment also fell back three points to 19, but recruitment looks positive, with 67%, nearly matching the year high of 68% in Q2, saying they are recruiting.

The types of jobs firms are trying to fill makes interesting reading, with a sharp drop in part-time jobs from 22% to 12%. Full time vacancies rose by 10% to 88% and temporary jobs rose from 45% to 62% with both figures reaching new highs, while the number of permanent jobs fell to just 38%, the lowest figure ever recorded.

Yet 46% of firms reported recruitment difficulties, up by 16% on Q3, with management and skilled manual positions proving the most difficult positions to fill.

There was more good news on the cashflow front, with its balance of 2 returning to positive territory on the back of 27% of firms reporting an increase.

There was also something of a surge in firms increasing investment in plant and machinery, up 10%, with the balance of 29 being the strongest result in this sector since 2004.

Firms planning to invest in training also increased slightly, but the number of firms working at full capacity showed a slight increase from 34-35%.

Raw material costs were seen as the biggest pressure on prices, followed by pay settlements.

Inflation fears were leading the way in external concerns, followed by competition and tax, while interest rate worries also increased slightly, while exchange rates were now less of a concern.

The Chamber’s Chief Executive, Dr Ian Kelly, says: “With the Able Marine Energy Park finally being given the go-ahead and the people and business community of Hull celebrating winning City of Culture for 2017, we made the transition into 2014 on a high.

“The results of our last Quarterly Economic Survey of 2013 also suggest a positive start for businesses in the New Year, with a relatively high proportion of firms expecting to increase their turnover this year.

“Export orders and sales are also performing very strongly, rising to their highest levels since the survey began. This boost in trade is reflected by the additional business the Chamber’s in-house International Trade Centre is doing, supported by its highly-skilled staff led by Pauline Wade and its five star rating from the British Chambers of Commerce.

“There was a notable increase in the number of businesses expecting their turnover to increase, showing consistent improvement in the latter part of 2013.

“A corresponding shift in the types of jobs firms are trying to fill will also be welcome news for the region’s jobseekers, although the high unemployment in our region is still a concern.

“With the economy continuing its encouragingly steady recovery, inflationary fears are raising their heads among our business leaders, as are concerns over interest rate rises, but we still believe the first of those increases to be some way off”.

This was posted in Bdaily's Members' News section by Clare Burnett .