More firms expect to increase prices, only four out of ten expect profitability to improve over the next year, business rates move into the top three concerns and overseas sales have risen – the findings of East Midlands Chamber’s last Quarterly Economic Survey of the year paint a mixed picture.
Hundreds of East Midlands businesses, across a wide range of sectors, participated in the Chamber research and the data gathered based on a combination of measurable data and sentiment.
Sales and orders performance stabilised slightly over the last 3 months
UK
Sales down 3% compared to Q3
Orders up 2% compared to Q3
Overseas
Sales up 5% compared to Q3
Orders up 6% compared to Q3
Pressure to raise prices over the next three months increased
4 out of 10 firms anticipate raising their prices
(up from 3 out of 10 in Q3 2025)
Fewer firms operating below capacity
7 out of 10 businesses
(the figure has fluctuated across 2025 but fallen from 8 out of 10 in Q3 2025)
Investment intention in machinery and training has fallen
3 out of 10 have revised machinery investment intention downwards
(up from 2 out of 10 in Q3 2025)
2 out of 10 have revised training investment intention downwards
(marginal increase in the downward trend from Q3 2025)
Recruitment is hesitant but unchanged
Half attempted to hire new staff
(no significant change from Q3 2025)
7 out of 10 businesses expect their workforce to remain the same
(no significant change from Q3 2025)
6 out of 10 businesses reported difficulties in finding suitable staff
(a marginal drop of 4%)
Confidence in profitability and turnover for the next 12 months remains fragile
4 out of 10 businesses expect profitability to improve
(a drop of 5% from Q3 2025)
Half of businesses expect turnover to improve
(up 1% from Q3 2025)
Business rates move into Top 3 concerns of East Midlands firms, ranked in order
- Inflation
- Corporate Taxation
- Business rates
East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “What really stands out in this research is that while there has been a slight lift in overseas trade and in orders within the UK, there is a strong sense of caution.
“While inflation may have eased recently, it soared earlier in the year and has consistently been the greatest concern of East Midlands businesses throughout 2025. When combined with worries around corporate taxation and business rates, you start to see why firms are feeling the need to look at price rises on one hand and stalling their investment intentions in people, training and machinery on the other.
“Four out of ten businesses in the region anticipate having to increase their prices; three out of ten are pulling back on investment in machinery, another figure that has risen this quarter, while hiring staff remains hesitant.
“2025 will be remembered as a year of hiked costs for employers. We saw higher National Insurance contributions come in and a higher national living wage, for example. These were announced in 2024’s Autumn Budget but went into effect earlier this year, so it is likely firms thought twice about adding to their workforce, allowed some natural attrition and have not felt it the right time to invest in people. Despite tough conditions, though, it is encouraging that half the firms in the region still attempted to recruit.
“One figure that has changed little across 2025 has been around finding suitable candidates to fill roles. With only slight fluctuation and a little better than at the start of the year, the survey has consistently shown six out of ten firms struggling to recruit the right people which underlines the extent of the skills gap and the need to invest in it – one of the key asks in the Chamber’s recently launched Framework for Growth.
“For business rates to overtake competition and enter the top three greatest concerns of the region’s firms could point to some of the unravelling, finer detail, still being drip-fed from the Autumn Budget, where sectors like hospitality have cited concern about the impact they anticipate over the coming years. Competition is something that I usually like to see in the top three as it indicates fairly healthy operation – a business should always have its competitors in mind, so when overtaken by concerns relating to cost, you see more of this sense of caution underpinning thinking.
“With a slight uplift in overseas sales and orders and UK orders, inflation widely expected to ease across next year and the Autumn Budget now behind us, we may see more positive projections of anticipated profitability and turnover before long. However, for the current picture to be showing expectation of profitability over the next 12 months to have fallen 5% and only half expecting turnover to improve, we end the year with confidence still much lower than it could be.”
View East Midlands Chamber’s Quarterly Economic Survey findings for Q4 2025 here.
