Falling sales and orders as latest research reveals scale of challenges for East Midlands businesses

UK and overseas orders and sales dropped over the last three months and more firms are operating below capacity - findings from East Midlands Chamber’s latest Quarterly Economic Survey underline the tough trading climate faced in the region.

Covering the third quarter of 2025, responses were gathered from nearly 300 businesses across multiple sectors in the East Midlands and the findings based on a combination of measurable data and sentiment.

In the last three months, across the UK, sales were down 3%, orders down 1%, whilst oversees the figures were down 1% and 2% respectively.

Eight out of ten businesses reported operating below capacity - an increase from 7 out of 10 in the fourth quarter of 2024, whilst 3 out of ten firms said that they anticipated raising their prices over the next three months, a slight fall than the first two quarters of 2025.

Recruitment has fluctuated but is steady, with half of businesses (47%) having attempted to hire new staff, 2% fewer than in Q2 2025 but slightly more than in Q1.  Seven out of ten businesses expected their workforce to remain the same, whilst 6 out of 10 reported difficulties in finding suitable staff.

Confidence in profitability and turnover over the next 12 months remains fragile but has shown slight improvement, with 4 out of 10 firms expecting improvement, up slightly from the last quarter, with half of businesses expecting turnover to improve, also up on the previous quarter.

The top three concerns of East Midlands firms in order were inflation, corporate taxation and competition.

Speaking about the latest figures, East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “Drops in sales and orders, both in the UK and internationally, lay bare just how tough trading conditions have been. Uncertainty around the upcoming Autumn Budget on 26th November could have been among factors impacting buying decisions, while soaring inflation and constantly changing export tariffs will have also contributed to difficult trade.

“Higher employer National Insurance contributions and a higher national living wage - brought in following the last Autumn Budget - gave firms a tough hand. Mitigating the impact of more expensive staff costs might be expected to result in hesitant hiring or natural attrition but the fact that half of East Midlands businesses still attempted to recruit shows a sense of confidence. Apart from mild fluctuation over the last few quarters, recruitment has not really slowed, while there was also no change to the number of businesses – seven out of ten – saying they expect their workforce to stay the same in the coming months.

“Finding skilled candidates who can hit the ground running continues to be a challenge with no change to the number of businesses - six out of ten – having had difficulty filling roles with suitable people. The figure is lower than it was at the start of the year, though, having fallen from seven out of ten in the first quarter of 2025.   

“A fall in the number of firms considering putting up their prices, despite high inflation and labour costs is encouraging but it is possible the lower number of businesses reporting price pressure – now three out of four - could be due to having already raised prices earlier in the year. 

“Slightly raised profitability expectations for the next 12 months suggest some businesses see current conditions easing in time but at less than half of respondents reporting that, the outlook is not very reassuring. Only four out of ten respondents anticipate improved profitability, although half believe turnover could improve. It is possible firms are looking to the other side of the upcoming Autumn Budget for more stable ground and certainty.

“With inflation still the greatest concern of businesses in the region followed by corporate taxation, the Autumn Budget is an opportunity for the government to help level the playing field and allow business growth. Having had to bear the brunt of tax rises last year, it is essential that rumoured hikes do not hit firms again this year.”