CHAMBER NEWS
Strong return for confidence in region, finds latest QES
Confidence among East Midlands businesses is at its highest since before the last general election, according to new data compiled by the Chamber. The latest Quarterly Economic Survey (QES) for Q1
2021 showed a net 53% of businesses expect their turnover to improve over the coming year, with a third (net 35%) anticipating a rise in profits. It was the most comprehensive QES yet, with
responses from a record 540 businesses between 15 February and 8 March.
‘The EU remains the East Midlands’ most significant trading partner’
Chris Hobson, director of policy and external affairs at the Chamber, said: “The survey data suggests businesses are ready to grow and support the wider economic recovery the country now needs.” “Sentiment among businesses is as strong as it has
been since summer 2019, supported by the vaccine rollout, a roadmap for reopening the economy and a broadly positive response to the spring budget.” Investment intentions are also on the up, with a net
7% and 15% respectively planning more investment in people and equipment as they look to repoint their business to succeed in a post-Covid world. Recruitment expectations are also strong – 30%
expect their workforce to grow, with the majority of these posts full time and permanent, with only a small percentage (7%) expecting reductions in workforce over the next quarter.
Despite these positive signs, cashflow – which
worsened for the majority of firms in each quarter of 2020 – remains a problem for a significant number of businesses, with a net 14% reporting this to be down once again in Q1. And while UK activity is recovering well, overseas
activity continues to trail behind. A third (33%) saw overseas sales worsen over the quarter – only 24% reported an improvement – with four in 10 witnessing a drop in EU activity. “The EU remains the East Midlands’ most significant
trading partner, so the extent to which businesses are able to continue moving up the learning curve for the new way of trading – or in fact whether some of the problems are structural and irreversible – will be of great importance to future prospects,” said Chris. How the economy handles price pressures will also
be significant, he believes. Four in 10 expect their prices to increase over the coming months, rising to six in 10 when looking solely at manufacturers – largely driven by a growth in raw material prices, which were reported by 85% of manufacturers. Chris added: “Over the past 12 months, many
businesses have looked at their operating models and have sought to position themselves to succeed as restrictions are lifted. New ways of working initially forced upon businesses by the pandemic have brought forward some opportunities for efficiencies and greater opportunities to collaborate. “The success of this activity will be put the test over
the coming months as the economy reopens. This set of results suggests that businesses are up for the challenge.”
business network April 2021 29
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