Chamber survey shows regional economy recovering, but worrying signs of inflation
Date published:
North East England Chamber of Commerce’s quarterly economic survey shows a significant improvement in business performance and confidence for the first time in over 12 months.
The results show UK sales and orders indicators had risen by 16.2 points and future profitability was also up at 34.1 compared to 20.8 in the last quarter.
Lesley Moody, Chamber President (AES Digital Solutions) said: “The continued easing of restrictions and the successful implementation of the vaccine programme has allowed more businesses to return to something akin to normality and gives us hope for the future.
“The headline figures presented in this report are a reflection of the continued resilience, ingenuity and determination of our business community to succeed, no matter what is thrown their way. While many obstacles remain, we must ensure these qualities are capitalised on to build a sustainable, long term recovery.”
Other factors highlighted by respondents included the importance of customer loyalty and existing relationships. Businesses praised customers who had stuck with them during difficult times and who had been responsive to new ways of product and service delivery.
Staff attitudes were also commonly reported, which included: a willingness to work in different ways, dedication, as well as staff being committed to ensuring the survival of the business.
In terms of recruitment over half of respondents attempted to recruit full-time staff (56.8%), representing an increase on levels recorded last quarter (46.7%) and well above Q2 last year (22.1%). More businesses attempted to recruit permanent staff this quarter (52.8%), much higher than the number recorded last year (19.4%).
Despite the good news there were also some worrying business concerns revealed in the survey. Inflation had become the primary concern, with more than half of Chamber members saying they were more worried about it now that they were three months previously. This was being driven by a number of factors, chiefly raw material costs and staff shortages.
Disruption to supply chains due to the pandemic and Brexit were also causing problems for businesses.
Lesley Moody said: “Many firms, especially those in sectors such as hospitality, travel and culture, are still subject to restrictions that severely hamper their ability to trade after an incredibly difficult year. They must be supported to ensure the long-term viability of such a crucial part of our economic and social landscape.”
The Chamber’s Economic Survey is in association with Durham University Business School.