Businesses have reported signs of resilience in early 2026, with improvements in sales, forward orders and cashflow, according to the latest Staffordshire Chambers of Commerce Quarterly Economic Survey (QES).
The survey, which covers the first quarter of the year, points to a small uplift in domestic activity, with 36.8 per cent of firms reporting increased sales over the past three months, up from 35.3 per cent in the previous quarter. At the same time, the proportion reporting a fall in sales dipped slightly to 18.8 per cent.
A third of businesses said advanced orders or bookings had increased, a significant rise from 26 per cent in Q4, while fewer firms reported a decline in future work.
Cashflow also showed signs of recovery, with 30.1 per cent of respondents reporting an increase, compared to 23.3 per cent previously. The number of businesses anticipating a drop in cashflow has also fallen.
There were also encouraging signs in skills development, with nearly three in 10 firms reporting increased spending on training.
However, the survey highlights a more cautious picture when it comes to growth and investment.
Workforce expansion appears to be slowing, with only 23.3 per cent of businesses increasing staff numbers in the last quarter, down from 26.7 per cent. Expectations for the months ahead are similarly subdued, with just 20.3 per cent planning to grow their workforce.
Recruitment activity has also fallen, with fewer than half of firms attempting to hire in the past three months, while the number choosing not to recruit has risen.
Investment in plant, machinery and capital has dropped, with just 11.3 per cent of businesses reporting an increase, down from 20.7 per cent in the previous quarter.
While 60 per cent of firms still expect turnover to grow over the next year, this is down marginally, and more businesses now anticipate a decline. A similar trend is seen in profitability, where expectations of growth have dipped.
Fewer businesses expect to raise prices in the coming year, and more anticipate cutting them. Labour costs remain the biggest driver of price increases, followed by utility bills.
The survey also found that 37.6 per cent of firms are now operating at full capacity, a small increase on the previous quarter.
Declan Riddell, policy adviser at Staffordshire Chambers of Commerce, said: “Our QES Q1 2026 survey results offered some glimpses of optimism, with more businesses reporting a growth in the levels of advanced orders, customers or bookings.
“There was also a noticeable growth in the number of businesses reporting increased cashflow and a growth in training investment.
“On the negative side, survey results paint a picture of fewer businesses trying to recruit and more businesses expecting a dip in future turnover and profitability.
“Most of the QES Q1 surveys were completed before the outbreak of conflict in the Middle East. Businesses are understandably nervous about the potential disruption to oil and gas supplies and uncertainty around prices and inflation. It prolongs what has been a very uncertain start to 2026.
“Staffordshire Chambers of Commerce would like to thank all survey respondents who took the time to complete a QES. Your feedback is valuable as a barometer of local business outlook and confidence.”
