New research finds business confidence falling in Nottinghamshire and across the East Midlands

Confidence among East Midlands firms continues to decline as cost pressures – coupled with falling customer demand and access to cash – take a toll, new research reveals.
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The East Midlands Chamber’s quarterly economic survey (QES) found the proportion of businesses expecting to record improvements in profitability and turnover over the coming year has fallen by 21 per cent and 17 per cent respectively between the second and third quarters of 2022.

A lack of optimism on what lies ahead is being driven by a decline in UK and overseas sales, as well as advanced orders, alongside a 18 per cent negative swing in cashflow quarter-on-quarter.

The tightening grip of the ‘cost-of-doing-business crisis’ – led by rising costs for energy, people, raw materials and fuel – means almost six in 10 firms now expect they will be forced raise their own prices, while intentions to invest and recruit are now sliding.

Chris Hobson presenting the findings the East Midlands Chamber's quarterly economic surveyChris Hobson presenting the findings the East Midlands Chamber's quarterly economic survey
Chris Hobson presenting the findings the East Midlands Chamber's quarterly economic survey
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Key finding for Nottinghamshire were:

Sales dropped between the second and third quarters of the year – falling by 16 per cent domestically and four per cent overseas – while advanced orders also fell by seven per cent in the UK and three per cent internationally

While there was a 11 per cent rise in businesses increasing their workforce between the quarters, future outlook is less optimistic with a 15 per cent slide in the proportion of firms expecting to add to their headcount.

This comes as 73 per cent of businesses attempted to recruit in Q3 but, of this cohort, 72 per cent encountered problems with filling vacancies across a relatively even split of professional, skilled manual, unskilled and clerical workers.

A net 57 per cent of businesses expect they will be forced to raise prices (up from a net 55 per cent in Q2) as they grapple with rising costs for utilities, people, raw materials and fuel.

Cashflow, having been down for a net one per cent of firms in Q2, is now down for a net 18 per cent of businesses, marking a 19 per cent negative swing, while opportunities for growth are in short supply with 38 per cent at full operating capacity.

A lack of room at the margins means investment intentions continue to trend downwards – falling by six per cent quarter-on-quarter for plant and machinery, and two per cent for training.

Business confidence has nosedived, with the proportion of businesses expecting improvements in profitability and turnover each dropping by 10 per cent between the second and third quarters.

Chris Hobson, East Midlands Chamber director of policy and external affairs, said: “These results paint a difficult picture for businesses.

“For the first time, demand indicators – how busy businesses are in selling their goods and services – have also dropped, both internationally and here in the UK.

“This is a concern as it suggests the impact of inflation is starting to dull activity.

“Cashflow is now worsening for more businesses than it’s improving for and, when considered with the well-publicised price pressures that are now at a critical point for many firms, this all points to the need for immediate action to support businesses.

“We also need a longer-term strategy in order to instill confidence and give them the encouragement they need to start taking more strategic decisions around investment.”