Recruitment challenges and mounting price pressure reported by East Midlands firms in latest research

Richard Blackmore from The East Midlands Chamber

Sales within the UK and overseas are up 4% but more firms in the region say finding suitable staff is a challenge, up from six to seven out of ten, while 3% more are considering raising their prices – East Midlands Chamber’s first Quarterly Economic Survey of 2026 reveals ‘more caution than confidence’.

Hundreds of East Midlands businesses, across a wide range of sectors, participated in the Chamber research, which is delivered in partnership with the University of Leicester. The data gathered in the survey is based on a combination of measurable data and sentiment.

Sales and orders performance stabilised slightly over the last 3 months, with sales up 4% on Quarter 4 of 2025 but with orders down 1%. Overseass figures for the same period were at 4 and 16% respectively.

Pressure to raise prices over the next three months remains with 4 out of 10 firms (43%) anticipating the need to act, up 3% on Quarter 4 of 2025 and 12% from Quarter 3.

The majority of firms continue to operate below capacity, with 73%, 7 out of 10 businesses affected, unchanged from the last business quarter.

Intention to invest in machinery and training has risen slightly, 2 out of 10 (16%) revising their investment intention in an upwards direction, a 3% increase on the last quarter, with the same number, applying to investing in training.

The challenge of finding suitable staff has increased slightly with 7 out of 10 businesses (67%) having reported difficulties in finding suitable staff, up from 6 out of 10 (59%) in Q4 2025.

There has been a fall in the number of businesses attempting to recruit staff – down 3% to 45%, but more businesses have considered increasing their workforce. 2 out of 10, (20%) expecting to do so in the next 3 months – a 6% net increase.

There has been a slight improvement in confidence in profitability and turnover for the next 12 months – 4 out of 10 (36%) businesses expect this – a 3% net increase, half of businesses (47%) expecting turning to improve, a 2% increase.

Competition overtakes Business Rates in the top 3 concerns amongst East Midlands firms, third behind inflation and corporate taxation.

East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “Operating with more caution than confidence is the general approach East Midlands businesses seem to have taken across this quarter to mitigate against high costs before looking at investing to grow.

“Lifts in UK and overseas sales are strong performance indicators, suggesting slightly more stable trading than we saw throughout 2025 but with more firms reporting pressure to increase their prices and less than half having attempted to hire staff, being mindful of costs would seem to remain front of centre of thinking.

“Inflation, still above the Bank of England’s 2% target, continues to top concerns reported by firms, along with corporate taxation so when you factor in the lift of 3% in businesses considering raising their prices and couple that with hesitant hiring in recent months, the sense of mitigating against cost is clearer.

“With many firms likely to have reduced their cost base where they could, any increased investment intention in machinery, up 3% from the last quarter and training, up 2% from the last quarter may mean businesses have already made difficult decisions and are now thinking more about growth.

“On recruitment, while there has been a 6% net lift in businesses intending to increase their workforce, we’re only talking about two out ten businesses. Finding suitable candidates to fill roles is a persistent problem. Across 2025, six out of ten businesses reported difficulty finding the right staff but for this figure to have crept up to seven out of ten underlines the urgent need for skills investment, as proposed in the Chamber’s Framework for Growth.

“Increases of 3% in confidence of profitability and 2% in turnover confidence for the next 12 months are encouraging but as we approach a new financial year, a layer of uncertainty could cloud the outlook for the months ahead. Any economic impact from the Middle East conflict may not have been fully seen yet, while from April businesses will be adjusting to the first stages of the Employment Rights Act coming into force, adding to challenges already faced by business.”