Optimism abounds in the regional economy according to the latest analysis.
Sales and orders have seen an uptick in the first quarter, edging into positive territory, with expectations of turnover improvement among a third of firms surveyed by Hull and Humber Chamber of Commerce. Profit expectations are also heading in the right direction, although increases remain in negative territory overall.
The first quarter of 2023 came with a feeling inflation may also have peaked, adding to the upbeat mood on a lacklustre 2022.
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External affairs director at the Chamber, David Hooper, said: “This set of survey results are the most positive we have seen for some time in terms of business optimism for the next 12 months, but there is still plenty to concern companies on the economic front.
“Cashflow is still a challenge for some, and there is little investment in staff training, although the manufacturing sector is looking more confident with more firms investing in plant and machinery in the last quarter.
“With hopes of improved turnover and profit expectations for the next 12 months, we may be entering a new period of growth, however, staffing issues are still a major concern for Humber firms, a view reinforced by the Chamber’s area council meetings where staffing issues are always a hot topic in our state-of-trade round-ups.”
Drilling down into the books, and across the board domestic sales saw the balance figure climb back into positive territory, up by 26 points to 13, while home orders improved by 19 points, but the balance figure was still negative at -8. Export sales and orders were subdued.
The number of firms working at full capacity was up 12 per cent to 45 per cent, with 38 per cent of firms saying they planned to recruit more staff.
Fewer businesses said they expected prices to rise in the next three months, with the balance figure dropping six per cent to 57, though the biggest concern remains the cost of raw materials. Finance was also a key concern, while pay settlements was less of an issue this quarter, as were other overheads.
Tax proved to be the biggest external concern for companies in this quarter - with fieldwork coming ahead of the Spring Budget. More businesses were concerned about interest rates and business rates, while almost two thirds of respondents saw inflation as a major worry.
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