Humber businesses are looking ahead to a tough winter with trepidation, according to the findings of a new survey by the Hull and Humber Chamber.
Interest rates at a 30-year high, inflation predicted to climb still further before it peaks, supply chain issues and a cost of living crisis hitting consumer confidence, are all reflected in the Quarter 3 figures.
Research by the Hull & Humber Chamber of Commerce highlighted a drop in business confidence across all sectors, with concerns about rising interest rates and inflation again proving to be a major worry with still no end in sight to the economic turmoil.
Domestic Sales were down 13 points to a balance figure of –8, while Domestic Orders dropped even further, down by 37 points to a balance figure of –40.
The export sector was also down this quarter with Export Sales dropping a further 25 points into negative territory to –50, while Export Orders dropped a further 17 points to a low balance figure of -67.
One of the few bright spots in Quarter 3 was a slight rise in the Employment figure, which was up 11 points on the previous quarter, reflecting the summer trading period, however expected employment for the next few months was down 13 points on the last quarter to a balance figure of 5.
More firms reported concerns around Cashflow, with the balance figure dropping a further 14 points on last quarter to –23.
Turnover expectations also fell back noticeably, dropping 33 points and into negative territory with a balance figure of –31, indicating that businesses are expecting a slowdown continuing slowdown in trade as we head into the autumn.
Similarly, Profit Expectation was also in the doldrums in Quarter 3, with fewer firms expecting to see a rise in profits. The balance figure dropped 23 points to –44.
Only 36 per cent of respondents said they had tried to recruit staff in the last three months, but of those who had, most were trying to fill permanent positions within their businesses, although there was also an increase in the number of firms looking for temporary staff.
The biggest challenge for firms in this quarter was filling clerical roles, although there was also a demand for skilled manual workers and management roles.
Perhaps unsurprisingly, only 19% of firms said they were working at full capacity this quarter.
More firms were concerned about their ability to access finance, although fears over raw material costs were down slightly, as were worries over pay settlements.
Exchange rates were an increasing worry for some, which as we move into quarter four following the Government’s mini budget and with the pound struggling against the dollar, may increase in the coming months during what continues to be a turbulent time for the markets.
Chamber External Affairs Director David Hooper said: “Business confidence has taken a nosedive in the last quarter, with rising interest rates, inflation and energy prices piling on the pressure.
“However, it should be noted that this survey was carried out before the Government’s mini-budget, but its effect is unlikely to fundamentally change business sentiment going into the autumn.
“Most sectors have been under considerable pressure in the last three months, and the survey shows there is little optimism for any improvement in the coming months, with turnover and profit expectations both well down on the previous quarter.
“Hopefully the energy cap for businesses will help a bit, but inflation is still a major concern as firms attempt to plan for what still looks like a challenging future”.
