Chamber survey reveals complex picture for region’s businesses
Date published:
The Chamber’s latest survey reveals a complex picture for the region’s businesses, with some positive trends emerging however significant challenges remain.
- Labour costs remain the most frequently cited price pressure, affecting 68.8% of respondents, despite a slight drop from last quarter.
- Energy prices have become a growing concern for businesses, with 50.9% reporting this as a key issue, an increase of 7.3% since Q2 2024.
- UK sales have increased by 2.7% compared to last quarter, though UK orders show a 4.2% decline, suggesting uncertainty in future demand.
- The number of businesses operating at full capacity has risen by 8.9% this quarter, although this remains below last year’s figures.
- The percentage of businesses reporting an increase in exports has grown to 36.6%, an 8.6% rise since last quarter.
- Despite some easing, concerns about staff shortages are still elevated, with 38.9% of firms highlighting this as a challenge.
The latest results from our Quarterly Economic Survey (QES) – the largest independent business survey of its kind in the UK – indicate a business community that remains cautious but resilient.
Although pressures from costs such as raw materials and labour are starting to ease, many firms are still dealing with the ongoing fallout from inflation and supply chain disruptions.
Price pressures
The Q3 2024 results show a decrease across all price pressures compared to last quarter, with notable decreases in raw material costs (-12.2%), fuel costs (-9.4%), and utilities (-5.9%). Labour costs, while still a concern for 68.8% of businesses, have decreased slightly (-5.4% compared to Q2 2024).
Despite these improvements, energy prices remain a persistent issue for businesses across both the manufacturing and service sectors.
Workforce and recruitment
Concerns about staff shortages have increased by 3.4% since last quarter, highlighting ongoing difficulties in the labour market. The data indicates a growing interest in hiring for part-time (+4.1%) and permanent staff positions (+0.1%), but there have been declines in the number of firms looking to recruit for full-time (-4%) and temporary (-3.1%) roles.
Business investment
Investment intentions show a mixed picture. While the proportion of businesses planning plant investments has decreased by 2% since last quarter, there is a notable 9.2% increase compared to this time last year.
Training investment is also on the rise, with 18.9% of firms planning to invest more in upskilling their workforce – a 5.5% increase on Q2 2024.
Sales and exports
The survey indicates a 2.7% increase in UK sales, signalling potential stabilisation in the domestic market. However, UK orders have dropped by 4.2% since last quarter, which may point to declining business confidence about future demand.
Exporting activity has seen a positive shift, with 36.6% of respondents now involved in international trade – an 8.6% rise compared to last quarter.
Energy usage
The Q3 2024 survey shows that energy remains a key concern for North East businesses, with 50.9% of respondents citing it as an issue – up 7.3% from last quarter. In response, 76.8% of firms have implemented measures to cut energy costs, including encouraging staff to adopt energy-efficient practices, investing in new equipment and introducing local energy generation solutions such as solar panels.
Rhiannon Bearne, executive director of policy and representation and deputy CEO at the North East Chamber of Commerce, said:
“For our members and stakeholders in the North East, this quarter’s survey offers vital insights at a time when businesses are looking forward to several significant policy milestones, notably the new government’s first Budget at the end of the month.
“The results underline the importance of the Chamber’s continued advocacy work at both regional and national levels.
“Our goal is to ensure that business concerns are not just heard but that they actively shape policy decisions, paving the way for a stronger, fairer and more resilient North East economy.”
Deborah Walton, president of the Chamber, added:
“The data for this quarter offers a mixed outlook. While some indicators are moving in a positive direction – such as an increase in businesses operating at full capacity and higher UK sales – there are areas of concern.
“Staff shortages, energy prices and competition remain significant hurdles, and despite some easing, price pressures still weigh heavily on firms in the manufacturing and service sectors.
“Our focus now is to translate these findings into action. The Chamber will continue to champion business interests, advocating for policies that address these underlying issues.”
As the Chamber continues its advocacy work, these findings will inform ongoing discussions with both local and national policymakers, ensuring that the voice of North East business is front and centre in shaping the economic agenda.
Click here to view our Q3 QES report.