Quarterly Economic Survey - Q4 2025

Delivered in partnership with East Midlands Chamber

Summary

* The report uses data from the Quarterly Economic Survey carried out from 10/11/25 and 08/12/25 in the fourth quarter (Q4) of 2025.

Total respondents: 274

  • Businesses classified as Manufacturers: 39.0%
  • Businesses classified as Service sector businesses: 61.0%

Out of 274 businesses, 45.0% were active in international markets.

Business Size

  • Micro Businesses: 41.0%
  • Small Businesses: 34.0%
  • Medium Businesses: 19.0%
  • Large Businesses: 7.0%

Wider Economic Context

  • Unemployment rate (Jul’25-Sept’25): Increased from 4.7% to 5.4% compared to the previous three-month period.
  • Youth (16-17 years) unemployment: Increased from 37.3% to 49.1% over same time period leading to an all time high since 2011.
  • Job Vacancies (Aug’25-Aug’25): The vacancies were down by 99,000 (12%) compared to previous year. It saw decline in 16 out of 18 industry sectors. Overall, the number of vacancies have declined for 39th consecutive quarter since Mar’22-May’22.
  • Bank of England’s latest Monetary Policy report: Inflation has increased to 3.8% in Sept’25 and is projected to fall to 3% in coming quarters. The fall is accounted by lower projected contribution of energy and food prices and expected reduction in services inflation.
  • Exchange rates (Sep’25): GBP stands at €1.13 – a decrease by €0.06 since Apr’25.
  • International Trade (Q2 2025): Exports valuing £7.29 billion.

Region at a Glance

*Net Value = Increase - Decrease

🟢 Positive; 🔴 No change; 🟡 Negative

State of Economy Index

Compared to previous quarter, the current quarter saw steep growth in the state of economy index. The value for fourth quarter of 2025 is -33.

Results

UK Sales

UK Orders

Overseas Sales

Overseas Orders

Past Employment

Future Employment

Recruitment Attempted

Recruitment Problems Faced

Recruitment Difficulties

Positions Filled

Cash Flow

Operating Capacity

Future Prices

Price Rise Pressures

Investment in Machinery

Investment in Training

Confidence Turnover

Confidence Profitability

Business Concerns

Business or economic factors affecting business

Positive sentiment count 😊 : 24

Negative sentiment count 😠 : 32

Neutral sentiment count 😐 : 14

Commentary

Fragile confidence and stalled investment persist among East Midlands firms with increased intention to raise prices

Responses from the East Midlands business community, based on current economic conditions, paint a bleak picture for the region’s economy. This is dominated by concern over government policy and its impact on small to medium-sized enterprises (SMEs).

The report reveals a mixed economic picture for the East Midlands across 2025, driven by the sentiment ahead of the Autumn Budget. While a sense of stability is evident across some measures, fluctuations and uncertainty persist.

Sentiment on the economy shows concerns about inflation, corporate taxation, and business rates remain.

The job market favours full-time, skilled manual/technical roles. Manufacturing costs are expected to increase, driven by labour and utility costs. Capacity utilisation remains below full potential, indicating some economic slack. UK sales dipped while orders rose, reflecting a complex economic environment. Investment in machinery and training decreased significantly during the last quarter of the year.

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