Turnover and profits drop as exports do better in Humber

Survey results by Hull & Humber Chamber of Commerce have shown a modest recovery in foreign trade, while home markets remain subdued and businesses are concerned about raw material costs, competition and tax.

The Chamber’s quarterly economic survey, which covers the second quarter of 2019, also showed profit expectations for the Humber area took a tumble but business are expecting their prices to stay the same.

The Chamber, which represents over 1,400 companies in the Humber region, said its research suggested firms are absorbing an increase in raw material costs.

The survey indicated interest rates and the rate of inflation were less of a worry this quarter, but other overheads were proving to be a continuing challenge.

In the last three months cashflow had improved, with the balance figure rising to 18 points, staying in positive territory after six months in the doldrums.

However, the number of businesses planning to invest in training dropped by just over half when compared to the last two quarters.

Similarly the number of firms which are planning to invest in plant and machinery in the next three months also fell further into negative territory, dropping 10 points on the last quarter to –7, the lowest it has been for a year.

Domestic sales recovered slightly, up by nine points on the last quarter with a balance figure of nine, but this is some way below the figures reported in quarters three and four of last year, which recorded balance figures of 24 and 25 respectively.

Home orders fell back into negative territory with a balance figure of –3 this time, compared to nine in quarter two and zero in quarter four of 2018.

Export sales rose by 12 points to a balance figure of 22, with export orders mirroring those figures.

The balance figure for employment in the last three months was also up this time, almost double the figure reported in the first quarter of the year, but employment prospects for the next three months weren’t as positive, with the balance figure dropping by nine points to 20.

Of the those businesses which said they had tried to recruit staff this quarter, Skilled Manual and Management positions were once again the most difficult to fill.

Fewer than half of the companies which responded to the survey, (45%) said they were working at full capacity.

Chamber Chief Executive, Dr Ian Kelly, said: “It was good to see cashflow improve and some relief for the import and export sectors in the second quarter of 2019, but it is clear the rest of the economy is struggling to make much headway.

“The uncertainty facing businesses and the economy is now causing all sorts of problems and we need to see a resolution to Brexit, one way or the other, as well as an early spending review and a “Budget for business” to restore investment along with wider momentum and confidence.”

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