Respondents of East Midlands Chamber’s second Quarterly Economic Survey of 2026 have reported sharp drops in sales and orders, both in the UK and overseas; reduced expectation of an increase in profitability or turnover across the next 12 months and there has been a slight increase, to five out ten, in those considering price increases.
On recruitment, the majority, six out of ten, are still struggling to find suitable staff but the figure was below Q1 of 2026, at seven out of ten, while there was a 2% lift in businesses attempting to hire. A quarter reported having revised their machinery investment downwards while a fifth said the same of training investment.
East Midlands firms that took part in East Midlands Chamber’s Q2, 2026 Quarterly Economic Survey, delivered in partnership with the University of Leicester, covered a wide range of sectors.
Findings from the survey – the biggest business survey of its kind in the East Midlands – are used to help shape policy discussions locally, regionally and nationally.
Sales and orders drop sharply over the last 3 months
UK – compared to Q1, 2026
- Sales down 7%
- Orders down 7%
Overseas – compared to Q1, 2026
- Sales down 4%
- Orders down 19%
Pressure to raise prices over the next three months increases slightly
- 5 out of 10 firms (46%) anticipate raising their prices
up 3% from Q1, 2026 and up 15% from Q3, 2025
Majority of firms continue to operate below capacity
- 7 out of 10 businesses (74%)
no significant change from Q1, 2026
Investment intention in machinery and training has fallen
- A quarter (25%) have revised machinery investment intention downwards
1% more than Q1, 2026
- One in five (19%) have revised training investment intention downwards
3% more than Q1, 2026
Challenge of finding suitable staff eases slightly but remains reported by the majority of businesses
- 6 out of 10 businesses (63%) reported difficulties in finding suitable staff
down from 7 out of 10 (67%) in Q1, 2026
Slight lift in businesses having tried to recruit staff
- More businesses (47%) attempted to hire new staff
up 2% from Q1, 2026
No change in businesses considering increasing workforce but the number remains low
- 2 out of 10 businesses (19%) expect to increase their workforce in the next 3 months
no significant change from Q1, 2026, net fall* of 1%
Confidence in profitability and turnover expectation for the next 12 months falls
- 4 out of 10 (39%) businesses expect profitability to worsen
Net fall* in confidence of 11% from Q1, 2026
- 3 out of 10 (26%) expect turnover to worsen
Net fall* in confidence of 12% from Q1, 2026
* ‘Net fall’ is based on the percentage of respondents expecting an improved outlook having dropped, while the percentage of respondents expecting a worsened outlook increased
Business Rates overtake competition in Top 3 concerns of East Midlands firms, ranked in order
- Inflation (no change from Q1, 2026)
- Corporate Taxation (no change from Q1, 2026)
- Business rates (previously in fourth place in Q1, 2026, below ‘competition’)
East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “Business has faced a perfect storm in recent times with tough headwinds from all angles – from increased business rates to soaring energy costs, to the rising cost of employment – and then hit, at the exact time the survey was conducted, with the Middle East conflict.
“The timing of these results, therefore, gives us useful insight into the extent to which the war – with the raised energy costs it has brought, and inflation widely expected to go the same way – has added to what was already fragile confidence among business; something we saw throughout the whole of 2025.
“Shortly before the conflict, inflation was showing signs of easing – now forecasts suggest the opposite, so it’s not surprising that inflation has not moved from being the number one concern of business, especially amid so many other high costs.
“Business rates – which we have been calling for Government to urgently review – have moved back up into the top three concerns, alongside corporate taxation, so high costs are clearly front and centre and need to be addressed.
“The combination of the high cost of doing business and the sense of uncertainty the Middle East conflict has brought are likely to have contributed to the fall we’ve seen in expectation of increased profitability or turnover, while the continued hesitancy to invest shown in the survey data suggests businesses mitigating against high costs by reducing outgoings where they can.
“While there has been a very slight increase in attempts to hire staff, the majority – six out of ten – are still reporting that they struggled to find suitable applicants, underlining the need to fix skills shortages, while when it comes to training and machinery, investment has been pulled back – not a healthy sign; more of a protective measure.
“The Chamber’s Framework for Growth – a landmark publication we published at the end of 2025 – calls on policymakers to urgently prioritise specific actions like wider energy cost relief; a review of business rates and skills investment. Since the time of publication, the case to implement these asks – especially with the impact of the Middle East conflict and how it has pushed up costs, squeezing business further – has become greater, so it’s essential policymakers step up and act.”
View East Midlands Chamber’s Quarterly Economic Survey findings for Q2, 2026 here.
View East Midlands Chamber’s Framework for Growth in full here.
