The Humber economy began to grow again in the third quarter of the year as the region emerged from the national lockdown brought on by the Coronavirus pandemic
This is the Hull & Humber Chamber of Commerce’s second Quarterly Economic Survey since the virus struck in March, with the fieldwork having been conducted during the last week of August and the first two weeks of September.
During the national lockdown, reflected in the Quarter 2 survey results, the key indicators all took a big hit, but these Quarter 3 results have revealed a more positive mood in the local business community, with signs of a cautious recovery becoming apparent as businesses adjust to the “new normal”.
Chamber Chief Executive, Dr Ian Kelly, said: “It is encouraging to see early signs of the Humber economy coming out of its enforced hibernation, but we are in no doubt there are still many challenges to be faced as the Covid-19 crisis looks set to continue for several more months.
“We are concerned that the end of the furlough scheme may lead to a spike in redundancies, and welcome the extra support for businesses that was recently announced.
“We are also pleased to see the Prime Minister’s focus on jobs for young people with the Kickstart Scheme and a promised increase in apprenticeships which our own Chamber Training company will play its part in delivering.
“While there are many positives, our local businesses still face major challenges in the months ahead, so we would again urge people to buy locally wherever they can and support our traders as they work their way through the next few months and support the Humber’s economy”.
Research by Chamber showed that Home Sales and Home Orders in the last three months both improved markedly, but remained in negative territory and were still below the first quarter figures, despite Home Sales improving by 30 points and Home Orders by 35 points.
Export Sales and Export Orders also both improved, but remained subdued, with both sectors in the last three months improving by 12 points, but remaining in negative territory on –47 points.
Fewer firms reported cashflow problems in the last three months, with the balance figure rising 7 points to –31.
More firms were planning to invest in plant and machinery too, with the balance figure up 11 points to –26.
Turnover expectations for the next 12 months were up by 29 points to –28, an improvement on the last quarter’s figure of –37.
Profit expectations for the next year also recovered somewhat, improving by 13 points to –11, but only 27% of firms said they were working at full capacity.
More firms expected prices to increase in the next three months, while the biggest pressures on prices were expected to be pay settlements and finance costs. Raw material costs and other overheads were both down slightly on the last quarter.
With many workers still on the Government’s furlough scheme, employment worsened only by five points to a balance figure of –28, while expected employment for the next three months improved by one point to -8.
However, with the furlough scheme coming to an end in October, things could look quite different in Quarter 4.
The number of firms reporting recruitment difficulties was also up on the last quarter, with 13% more firms saying they had difficulties finding the right staff with part-time vacancies proving the most difficult to fill.
Management roles were the most difficult to recruit for, followed by unskilled or semi-skilled jobs.
The biggest external concerns facing businesses this quarter were fears over competition, up 17% and exchange rates, up 4% at 13%.
Business rates, inflation and tax issues were less of a worry in this quarter.