QES Report: Q3 2024

Businesses in Yorkshire are showing confidence levels higher than they have been in 12 months, new research from West & North Yorkshire Chamber of Commerce shows.

The Chamber’s Quarterly Economic Survey has shown optimism on profitability over the coming three months to have soared, up by 11 per centage points for service sector firms and six per cent for manufacturers. 

The survey also show appetite for investment to be largely moving in the right direction, particularly when it comes to capital investment. Our manufacturing sector reported a 25-point increase in investment plans while service firms also rose by 14 points.

However, while there is positive sentiment looking forward, the third quarter of 2024 was far from a great period for business.

When it comes to external pressures, taxation is now taking the top spot for business concern, having overtaken interest rates and inflation.

Sales, both domestic and abroad, remain on shaky ground. While service sector firms increased their exports by an impressive 15 per cent during Q3, sales as a whole declined during the period, with order books looking flat.

On job creation, there was once again a mixed bag. Manufacturers are more bullish, having posted a 12-point increase in hiring rates. However, the service sector fell back by 12 points and neither sector seems optimistic about job creation over the next three months.

Labour costs remain the top concern for businesses of all sectors, with energy costs still impacting manufacturers negatively.

Amanda Beresford, chair of West & North Yorkshire Chamber, said: “As you can see in this latest QES, concerns remain on tax, inflation and interest rates.

“With a new Government installed with a healthy majority and a manifesto commitment to growth, addressing these challenges must be top of their priority list for the short and medium term.

“As a Chamber we will continue to ask the right questions and receive the answers we need, putting our members’ interests at the heart of everything we do and championing our economy.

“Let us hope the optimism contained in this report remains consistent in months ahead and that we finally as a country get back to growth.”

Mark Casci, head of policy and representation at the chamber, said: “It is great to see so many firms out there anticipating increased profitability and the surge in investment plans is great news for the region.

“However, businesses still face myriad challenges.

“The fieldwork was carried out when both the headline rate of interest had fallen to target levels and the Bank of England’s Monetary Policy Committee cut interest rates for the first time since the pandemic, having been steadily raising them since the start of 2022.

“However, much as with consumers, these reductions are yet to filter through to day-to-day reality for many businesses.   

“It is also interesting to see taxation now taking the top spot in terms of external cost pressures.

“With the Budget due at the end of the month, it is now imperative that we see a programme of measures that give businesses the confidence to grow our economy and mitigate against the challenges which are holding them back.”

The report also looked at attitudes to remote working among employers.

It found that 22 per cent of businesses allowed unlimited working from home, just under half allowed it on a limited basis and 28 per cent did not allow it full stop.

When asked what impact this was having on their business, around 33 per cent of business reported either positive or very positive impacts while just under 20 per cent reported negative or very negative impacts, a significant number of businesses.

With many major employers, such as Amazon, beginning to row back on remote working, it will be interesting to see how the rest of the market behaves going forward.     

View the (Q3) QES Report here: https://wnychamber.co.uk/wp-content/uploads/2024/10/WNY-QES-Report-Q3-2024.pdf