EMPLOYMENT, turnover and profits are “on the up” in the second Quarterly Economic Survey of 2014.
While the changes aren’t dramatic, the research carried out by the Hull & Humber Chamber of Commerce does reinforce the air of optimism coming through from business leaders at the Chamber’s regional area council meetings in recent months, no doubt boosted by the wave of business successes the Humber region is currently enjoying.
The number of firms reporting a stable workforce rose by 11 points to 29 per cent, while the number reporting a decrease in their staffing levels fell slightly, with the balance figure rising by 14 points to 17, the highest it’s been since the third quarter of last year.
Firms expecting to increase their workforce also rose, up 11 points to 41 per cent, the highest it’s been for some time, with the balance also reaching a recent high at 34, up 9%.
Recruitment was fairly evenly split this quarter, with 75% of vacancies being for full-time posts, a slight rise on last quarter, but still below the figures for the last two quarters of 2013.
There are more temporary jobs than permanent, with a 54/46% split, with 28 firms reporting difficulties filling management positions with a further 17 finding it hard to find the right clerical staff.
As a further indication of a steadily improving economic picture, 71% of firms said they were expecting their turnover to improve, with only 7% saying they expected it to drop, giving a balance figure of 64, which is 19 points up on the first quarter of this year and the highest it’s been for some time.
Profit expectations have also shown a sharp increase, with the balance figure climbing 20 points on the first quarter’s results and is again the strongest balance figure we have seen for some months.
Interestingly however, only 34% of firms said they were working at full capacity, so there is still potential for many companies to take on more work without having to increase their workforce.
The number of firms planning to invest in training is fairly consistent with previous months, with the balance figure rising by 9 points this quarter, but more firms are considering investing in plant and machinery, with the balance figure up 9 points on the last quarter, at 30.
Exports, which have led the way in the last few surveys, seem to have found their level, but are still slightly ahead of the last quarter. Export sales are up 4 points with a balance of 71 and export orders are up 7 points on the first quarter with a balance of 74, but that is still two points down on the last quarter of 2013, perhaps reflecting the current strength of the pound.
Home sales balance figure has risen by 17 points to 38, due to fewer companies reporting a decrease, while home orders dropped two points on Quarter 1, but is still four points up on Quarter 4 of 2013.
Prices remained fairly constant this time around, showing a one point increase in the balance figure, while the biggest external concerns centre on inflation and tax. Notably concerns over competition have risen very sharply following a drop last quarter, from 14 to 38 points.
More firms are considering investing in new plant and machinery, with a nine point increase on the last quarter’s figure which puts it one point ahead of the result for the last quarter of 2013, showing a consistent rise over the last year.
The Chamber’s Chief Executive, Dr Ian Kelly, says:
“It’s encouraging to see that what our business leaders are telling us at the Chamber’s area council meetings is being reflected in this latest set of positive economic survey results.
“Home orders have increased while exports seem to have calmed a little after enjoying a strong run in the last six months or so, perhaps reflecting the strength of the pound. With many firms recruiting and an excellent improvement in profitability, it seems our economic recovery is still heading in the right direction.
“More good news also comes from the fact that the number of companies looking to invest in plant and machinery has shown a strong increase, and this will be helped by the recent Government announcements of an extra £103-million to be spent in the Humber on flood defences and growth opportunities.”