Chamber survey results show businesses in ‘cautious mood’

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The largest independent North East business survey’s results released today, 31 January 2022, show substantial concerns about inflation and energy prices. Over 80% of respondents were more worried about these two issues than they were three months ago. 

Organised by North East England Chamber of Commerce, the quarterly economic survey also found that North East businesses largely ended 2021 in a far better position than they started it. The proportion of businesses operating at full capacity (52.7%) was above levels recorded last quarter (44.6%) and Q4 2020 (30.8%) While domestic indicators have fallen back slightly from the third quarter, they remained in positive territory; indicating growth. 

Lesley Moody OBE, CBE Chamber President (AES Digital Solutions) said: “As we identified last quarter, the headline figures are undermined by some serious concerns on the horizon for our businesses. Export performance is worryingly flat, with firms identifying supply chain issues, increased costs and the continued disruption due to Brexit as the leading causes of this. This quarter also brings more worrying data on businesses’ cashflow. 

“There is a lot of media discussion about an impending ‘cost of living crisis’. We must not lose sight of the fact that we are also facing a ‘cost of doing business’ crisis. 

“When you add in the continuing concerns regarding staff shortages and a tight labour market, it is easy to see why businesses may be starting 2022 in a cautious mood. In the short term, business performance looks reasonably strong (especially after such a difficult couple of years) but it will not take long for challenges such as inflation to erode this performance. Policy makers must take heed of the warnings this survey provides.” 

The survey also examines the recruitment market with 59.7% of respondents saying they had attempted to recruit full-time staff in Q4, representing a slight increase on levels recorded last quarter (58%) and a substantial jump from this period last year (38.3%). 

A smaller proportion attempted to recruit part-time staff (36.6%), down slightly on last quarter (37.4%) but well above the level recorded last year (14.9%). 

Commenting on these figures James Carss, managing director of recruitment group NRG said: “The continuing rising trend in Q4 of recruiting full time staff is both unsurprising and telling on the overall high demands to attract, hire and retain staff in 2021.  We would normally (outside a pandemic) expect this to slow in the final quarter of the year, the fact that it hasn’t really demonstrates the desire of businesses to get up and running and back to normality which is of course very a very different picture from 2021. 

“In the previous year of 2020  there was far more uncertainty which was clearly determined by a lengthy lockdown. Currently it is a candidate’s marketplace with a large volume and choice of opportunities available, though undoubtedly there will be challenges for businesses in the future, having the right talent in place will be critical to achieve growth and profitability.” 

Durham University Business School is the associate sponsor of the Chamber survey. 

Download the full report here.

Chamber President sets out challenges for levelling up

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North East England Chamber of Commerce President, Lesley Moody, OBE, MBE today (20 January 2020) set out the important part businesses can play in levelling up and growing the regional economy.

Speaking at a Westminster Social Policy Forum event ‘Next Steps for the Northern Powerhouse’, she said: “North East statistics on areas such as health, education and employment fall way below the rest of the country. The result is that we can never hope to achieve our economic potential while these appalling gaps exist in our society.

“Unless we are prepared to acknowledge the serious challenges facing many of our people and our communities, we will continue to apply a heavy brake on our ambitions. So, we need to be honest with ourselves as to the starting point, then we can set short and long-term goals and plan how we best to monitor and evaluate the success, or otherwise, of levelling up. And again, some people might wonder why is business concerned about.

“Poverty, dying younger than the national average, and communities unable to grasp job opportunities, are all a moral tragedy and an economic own goal. It’s for business to make sure that addressing this is high on the agenda, so that further down the line we have a stronger community and a workforce with the skills needed to grow our economy

“What we have to do to achieve this is for regions to look at the bigger picture as well as levelling up activity with measures in place to evaluate its effectiveness.

“We also need to take into account the socio-geographical picture of our regions. A levelling up initiative in one part of a region should be good news for the wider region too.

“So, let’s be very clear. Business has both the opportunity and obligation to play a major role in tackling these issues. We want to build a ‘good’ economy in our region – one that is well connected, welcoming and supportive and in which barriers to prosperity are continually reducing.

“To do this, we will need to embrace the principles of ‘good business’ and ‘good work’. So, when it comes to levelling up, our offer is simple.

“There is enormous expertise in our business community. We know how to create jobs, upskill our workforce, innovate and solve some of the biggest challenges facing us today.

“We do this not just to make money, but also because we care about our communities and the places in which we operate. Because we know that we are an integral part of a good economy and that a good economy is good for all of us.”

Also speaking at the event were Henri Murison, director, Northern Powerhouse Partnership, Martin Tugwell, chief executive Transport for the North and Barry Hodgson, deputy director, National Innovation Centre for Data.

Chamber survey shows extent of businesses’ inflation and staffing worries

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North East England Chamber of Commerce’s economic survey for the third quarter of 2021 shows that while businesses have continued to recover strongly from the pandemic, they are facing significant pressures from price rises and staff shortages.

The survey, carried out in association with Durham University Business School, shows UK sales indicators had risen by 27.4 points while the current workforce score was also up at 35 compared to 22.1 in the last quarter. However, over 59% of businesses said they are now more worried about inflation than three months ago, while the figure for staff shortages was over 57%.

Lesley Moody, Chamber President (AES Digital Solutions) said: “It brings me great pleasure to be able to say that our businesses have, on the whole, continued to improve their performance over the last three months.

“However, the headline figures mask some serious issues affecting our businesses. Disruption to supply chains is affecting all parts of our economy, from manufacturers struggling to obtain materials to retailers running out of products. The causes of this are myriad, but Brexit, staff shortages, ongoing Covid isolation rules and global logistics issues are all contributing factors.

“All of these things are not only hampering business recovery and growth, but are also leading to a big spike in worries over inflation. Businesses are trying to recruit in a tightening labour market and are reporting large increases in salary levels. This is all unsustainable and may require swift action from policy makers to prevent business costs spiralling out of control.”

In terms of recruitment over half of respondents attempted to recruit full-time staff (58%), representing an increase on levels recorded last quarter (56.7%) and well above Q3 last year (31%). More businesses attempted to recruit permanent staff this quarter (53.3%), much higher than the number recorded last year (23.5%).  

Lesley Moody said: “If we can get this situation under control, then there is plenty in these results to give me confidence in our businesses’ ability to recover. The appetite for growth is there, and while the pandemic caused so much harm it also spurred on a great deal of innovation. We must hope that inflation is fleeting, and that we can get on with the job of building a stronger regional economy.” 

Download the full report here.

Region’s businesses urged to put fairness at heart

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More than 150 North East business leaders heard praise for their hard work during the pandemic and an ambitious vision for the future of the region’s economy with fairness and collaboration at its heart. 

The positive message was set out at North East England Chamber of Commerce’s AGM held at the Beacon of Light, Sunderland. 

Lesley Moody, MBE, Chamber President (AES Digital Solutions) paid tribute to the way the North East business community had supported each other but also the next challenge for them.  

She said: “In October the Chancellor will set out Government’s spending plans for the next three years. He will be under enormous pressure to address public finances following the massive increase in spending brought about by Covid. 

“But it would be short-sighted in the extreme for him to make decisions that ultimately hinder or reverse any progress towards levelling up. Instead, he must recognise both the disproportionate impact of the pandemic on regions like ours and our potential to make a much bigger contribution to the national economy.” 

She also paid tribute to outgoing Chamber chief executive James Ramsbotham, who was unable to attend the AGM due a bereavement.  

Lesley Moody said: “Had James been able to be here today, he would have set out his clear views on our region. He believes at a time when there has never been a greater need for high standards of behaviour, the region’s business community has proved to be an exemplar. His believes that we are now more trusted than we have ever been and he urged politicians to continue to follow the lead of our businesses in maintaining high standards in ethics and look after their customers and employees. James is clear that here in the North East our members aim to do and continue to strive to do more.” 

John McCabe, Chamber chief executive designate said: “The Chamber must always remain relevant and responsive to our members’ expectations and priorities. 

“Our region never stands still. Domestic and international markets are constantly evolving. New opportunities emerge and unforeseen, sometimes unprecedented challenges have to be faced. Regions require levelling up. 

“And if we create a network of good businesses, we will build a stronger, future-proofed economy, underpinning a better, fairer, greener society.  

“We’ll unleash the full potential of our people enabling them to contribute more to their region. We’ll create a North East that is unquestionably the best place in the UK in which to live, learn, work and play.  

“We won’t achieve this alone. We’ll renew relationships and seek to work alongside economic development partners, like-minded friends in the public and third sectors, academia and health as well as across the business community.  

m also looking forward to sharing this agenda with political leaders all across our region. I will do so in a spirit of cooperation because irrespective of party politics, the Chamber is open to collaboration with anyone who believes in a levelled up North East as we do.  

“That’s the North East I recognise and it’s at the heart of that diverse region where I want the Chamber to be found. It’s where we are uniquely placed to be as a champion and challenger, an advocate and leader for the whole of our North East.” 

The Chamber AGM was sponsored by the economic and business development arm of Sunderland City Council. 

Chamber survey shows regional economy recovering, but worrying signs of inflation

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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.