7 minute read
Economy
Unemployment falls but recruitment struggles continue
The Chamber has welcomed a fall in unemployment but say firms are struggling to recruit to help them recover from the coronavirus crisis.
Unemployment fell to 4.7 per cent in the month to June while there were 953,000 job vacancies nationally in the three months to July.
Tom Mongan, president of the Coventry and Warwickshire Chamber of Commerce, said the figures reflect what the Chamber is hearing from firms locally.
He said: “Of course, falling unemployment is very welcome news and the labour market is performing better than many thought it might when we were at the height of the crisis.
“However, when I go out and talk to businesses in the region, I am hearing time and again that they are struggling to recruit. Without the right level of staff, it becomes increasingly difficult for them to start growing again and that will stunt wider economic growth.
“It’s vitally important, therefore, that the government sets out a plan for tackling this issue so we can make sure we have the right skills for the roles that the economy is demanding.
British Chambers of Commerce head of economics, SurenThiru, said: “The latest figures confirm that the UK jobs market is recovering strongly as the boost to demand from the easing of restrictions helped drive higher payroll employment in July.
Firms are finding their feet again
Steve Harcourt with Louise Bennett
Coventry and Warwickshire businesses are finding their feet amongst COVID-19 and postBrexit restrictions, while the manufacturing industry has turned its fortunes around, according to a new survey.
The vaccine rollout and relaxation of restrictions has ensured that optimism amongst Coventry and Warwickshire businesses has continued to grow, marking twelve months of increased positivity, with the manufacturing sector enjoying a substantial increase in confidence.
The latest Quarterly Economic Survey (QES) conducted by the Coventry and Warwickshire Chamber of Commerce suggests that COVID-19 vaccination uptake has increased consumer confidence and encouraged people to go out and spend on social activities and indoor hospitality after months of pent-up demand.
The survey, which is delivered in partnership with Prime Accountants Group, is analysed by the Economy & Skills Group at Warwickshire County Council. Its analysis uses a similar score to the national Markits Purchasing Managers Index (PMI), where 50 is the balance and anything above means the majority feel positive and anything below means the reverse.
Confidence in the region’s manufacturing sector was reported as being above the national average PMI at 65.4, marking a 10.5-point increase on the previous quarter as firms made the most of reduced restrictions and increased employment, as well as newfound clarity over post-Brexit trade.
Employment in the manufacturing sector contributed to this trend, enjoying a transition from slightly negative to mostly positive as its score rose from 43.4 in Q1 to 68.6 in Q2 2021. The survey cited the revival of the labour market and the loosening of restrictions as reasons for this uptick.
Sean Rose, policy officer of the Coventry and Warwickshire Chamber of Commerce, said: “It is extremely promising to see an increase in business confidence not just in the services sector and the high street, but in the manufacturing industry too.”
Economic breakfast leaves plenty to digest
Business confidence continues to build but concerns remain about a number of ‘headwinds’ in the post-Brexit and postpandemic economic recovery.
That was the view from a virtual breakfast meeting hosted by the Coventry and Warwickshire Chamber of Commerce to discuss the findings of its latest Quarterly Economic Survey (QES).
But concerns were expressed about shortages in the supply of goods and raw materials such as timber and steel, and the knock-on effect on prices and productivity, the phasing out of furlough, and the combined impact on the staggered return of VAT to 20 per cent by next April and the repayment of deferred VAT.
There was also a discussion around potential cashflow pinch points ahead with COVID-19 cases rising again, and whether improved cashflow reported in the QES was due to the increased profitability of businesses or whether it was being skewed by the various government financial support packages and measures that have been made available.
Fears over rising inflation were also raised and how that might affect the longer-term economic landscape.
Steve Harcourt of Prime Accountants, which sponsors the QES, said businesses needed to remain agile so they could adapt to any change in conditions.
He said: “Confidence is good but what we have got to see is that turning into profits and growing businesses. Real issues remain with supply and pricing, and that’s been put into context by one business that I’ve been speaking to which began trading solely online during the pandemic. While they’ve had a great year selling online, because of the delays with stock they think there’s about £300,000 of sales that they can’t deliver at the moment because stock isn’t in the country.”
Games technology can be good for health and the economy
Adapting games technology for social good and positive health could be a strong future economic strand for Coventry and Warwickshire, according to a leading industry figure.
Sarah Windrum, who is chair of the Coventry and Warwickshire Local Enterprise Partnership, told a group of business leaders that collaborations between local tech businesses and our NHS Trusts, such as UHCW’s new Innovation Hub, will not only be key areas of innovation but could help drive a post-pandemic economic recovery in the region.
Windrum, who is CEO of IT business Emerald Group in Leamington Spa, was speaking at the Coventry and Warwickshire Chamber of Commerce’s latest #PolicyHour event.
She said: “It’s been really difficult over the last 18 months, particularly for events, festivals and City of Culture, but I’ve seen a lot of innovation.
“Health is one area. We are working very closely with UHCW and their new Innovation Hub engaging in new digital partnerships. We have a huge wealth of tech expertise in games technology locally; how do we apply that to finding new solutions such as helping people to manage their own health and wellbeing?”
She highlighted one project involving a games development company in Leamington Spa looking at the “gamification of mental health” and creating a virtual “self-care management space”.
She said: “People still look at games as not being good for us. How do we change that narrative? Games and games technology can be good for our self-care - and that’s a real area for growth.
“Games studios have the opportunity to develop their own IP with skills traditionally used in mobile games development for entertainment now being turned to social good.
Tom Mongan, president of the Chamber
Business leaders in Coventry and Warwickshire say firms in the region are being held back from reaching their full potential after it was revealed that economic growth slowed
The economy grew just 0.1 per cent in July according to the latest GDP figures and the Coventry and Warwickshire Chamber of Commerce believe it is down to a range of factors.
Tom Mongan, president of the Chamber, said: “The economy bounced back significantly when restrictions first started to be eased and that growth slowed in July leaving us still some way short of pre-pandemic levels.
“There are a number of factors holding businesses back and it is vitally important that these are addressed in order for us to get growing significantly again.
“They include issues in the supply chain which are preventing much-needed goods circulating around the economy. There are also difficulties in recruitment, which means businesses might be ready to grow but don’t have the people to support it.
“Of course, there are many out there who are still very cautious due to Covid-19 and it may take time for them to have their confidence restored.
