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

Declining investment and increasing future prices as latest research reveals a more stable East Midlands economy following autumn budget

The feedback from local businesses based on current economic conditions impacting the business paints a bleak picture for the East Midlands economy, dominated by concerns over government policy and its impact on small to medium-sized enterprises (SMEs). Businesses are struggling with rising costs driven by minimum wage increases, national insurance contributions, and high utility bills. Low consumer confidence, exacerbated by budget uncertainty and negative messaging, is leading to reduced marketing spend and delayed investment. The report highlights a lack of government understanding of small business needs, compounded by red tape, expensive transport links, and difficulties accessing funding. The construction and hospitality sectors are particularly vulnerable, with closures and reduced activity reported.

The report suggests a mixed economic picture for the East Midlands in 2025 majorly driven by the sentiments before the budget. While stability is evident across some indicators, fluctuations and uncertainty persist. Economic sentiment shows increasing stability towards the year’s end after the autumn budget, although 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. 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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