Chamber survey shows extent of businesses’ inflation and staffing worries
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.”