Businesses report strongest sales figures in years

HUMBER businesses had the best sales figures in the last quarter since before the recession, research released by Hull & Humber Chamber of Commerce shows.

The Chamber’s Quarterly Economic Survey found that 43% of companies increased their UK sales in Q4 2010 – the highest percentage since 2004’s second quarter. 

Taking into account the 22% of companies which found their sales decreased, the overall result is the best since Q4 2007.

In export sales, 30% of companies reported an increase and 9% a decrease, giving the strongest overall result since Q2 2006.

Despite the improving sales figures, turnover expectations remained static and profit expectations were at their lowest since 2009’s second quarter. 

Forty-five per cent expect to improve their turnover during the next 12 months, the same as in the last quarter, while 23% expect it to decrease. 

Thirty-two per cent expect their profitability to improve, down 5%, but the same number expect it to worsen.

With margins being squeezed over recent months, there was further evidence that price rises are on the way. 

Thirty eight per cent expect to increase their prices in the next three months, up 4%, but only 3% expect to decrease them, down 7%, – the highest overall result since Q2 2008.

In employment, 47% of companies tried to recruit staff and 22% increased the size of their workforce – the highest percentage since Q2 2008. 

However, the same number reduced the size of their workforce, giving the worst overall result of the year.  Eighteen per cent expect to take on additional staff over the next three months, but 14% expect to reduce the size of their workforce.

Investment plans were at their highest levels since Q2 2008 but still had an overall balance of zero.  As many (23%) plan to increase investment in plant/machinery as decrease it, and similarly equal numbers (22%) plan to increase/decrease investment in training.

Cashflow improved but the overall balance remained negative –  23% reported an increase and 31% a decrease.

Thirty two per cent of companies said they were operating at full capacity, the highest figure for a year.

Richard Kendall, head of policy and communications at Hull & Humber Chamber of Commerce, said: “Last quarter’s strong sales figures at home and abroad are welcome news and deserve to be celebrated.  2010 was a difficult year for many businesses but it ended relatively positively with the most widespread growth in sales we have seen for several years.

“However, there is no room for complacency.  Economic uncertainty remains and we have yet to see the full impact of the VAT increase and deficit-cutting measures.  Fewer businesses expect to increase their profitability than at any point in the last 18 months, suggesting that 2011 will be another tough year.”

“Hopes that the private sector would create large numbers of jobs to fill the gap left by public sector cuts have yet to be realised in our area.  Although the number of companies creating jobs has steadily increased over the last two years, in recent quarters the number cutting jobs has also increased.  Expectations for the next year are that there will be an overall increase in employment in the private sector, but not a large one,” he added.

“To maintain the recovery the MPC and the Government must continue to support businesses by keeping interest rates down, encouraging new start-ups and making it easier for small businesses to take on staff.”

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