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Welcome to the Quarterly Economic Report for Q1 of 2021

Despite difficult circumstances, we are starting to see the light at the end of the tunnel. The announcements of both the roadmap out of lockdown and the Chancellor’s Spring Budget should instil confidence in businesses in the mid Yorkshire region and beyond that we are working towards a brighter future.

While the economic climate is nowhere near ideal, I am confident that we can recover from this together. Overall, recruitment is improving, confidence is growing, and investment plans are being made, and we should draw great optimism from that. However, businesses are still facing challenges with trading arrangements following the UK’s departure from the EU, with manufacturing export sales levelling off and expectations of price rises in this sector. Despite this, UK sales have seen an increase in Q1, along with growing confidence in profits and investment across both manufacturing and services industries.

I would like to thank everybody who took part in the latest Quarterly Economic Survey. Your input is invaluable as we seek to analyse the issues being faced by businesses in the mid Yorkshire region, and take positive action to solve them. Your contributions are greatly appreciated.

As ever, we value your thoughts and encourage you to get in touch with our team with any queries or feedback. Please email getconnected@mycci.co.uk.

Once again I would like to thank the Leeds City Region Enterprise partnership and West Yorkshire Combined Authority for their continued support for this report. Thank you also to all of you who completed the survey; we know how stretched resources are at the moment but timely and direct feedback from companies is incredibly valuable in helping to advise regional and national policy makers.

(Martin Hathaway, Managing Director)

Executive Summary - Q1 2021

DOMESTIC SALES - Manufacturers continue to report increasing domestic sales although the pace of growth appears to have slowed a little and forward orders net balance fell back into negative territory. We report a large variance across service sector firms and whilst overall net balance was +3% within ICT and professional services net balance was +39% and +17 respectively; whereas leisure, hospitality and non-essential retail report a net balance of -24%.

EXPORT SALES - The service sector reported declining international sales in the last quarter, likely down to disruption and new trading arrangements with the EU. Manufacturers also recorded slowing export sales and likely down to similar reasons as companies get used to new paperwork and declarations. Just under a quarter of manufacturers said they hadn’t faced any difficulties moving goods, whilst around a third of service sector firms also said they had experienced no disruption. However, 60% of manufacturing firms said they had experienced difficulties exporting and 1 in 2 faced challenges bringing goods into the UK. Roughly 4 in 10 service sector businesses said they had experienced difficulties either importing or exporting.

EMPLOYMENT - Despite slowing sales activities, employment numbers are starting to return back to pre-crisis levels. One third of service sector firms and nearly 1 in 2 manufacturers attempted to recruit in the last quarter with the majority of vacancies full time and permanent. 41% of service sector and 32% of manufacturers reported difficulties finding appropriately skilled candidates.

INVESTMENT - Investment intentions also improved in the last quarter as companies begin to see beyond the current crisis. Capital and training investment net balance figures improved within manufacturing and service sector firms.

BUSINESS CONFIDENCE - This quarter saw a big improvement in business confidence with firms expecting increases in turnover and profits over the next 12 months at levels last reported in 2017 for service sector and 2015 for manufacturers. However, cash flow remains challenging for many and manufacturers reported that a significant majority would look to increase prices to compensate for the huge increase in costs they are facing from haulage and shipping, Brexit administration and other input costs.

Read the latest QES Q1 report online

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What?

The Quarterly Economic Survey is a regular snapshot of key information, such as local business activity, confidence and issues, which policy makers and government ministers use to inform their decisions and thinking. We incorporate statistics, based on data contributed by members, on sales, orders, export, employment and the impact of economic factors such as inflation and exchange rates to provide ministers with an accurate and up to date analysis of business in the Mid Yorkshire region.

Why?

If you want to see change and influence policy on the business issues that are important to your business then you need to ensure that you are feeding the information into the system. Participating in the QES is an effective strategy to have your voice heard by those who can do something about the business issues you care about.

How?

Every quarter, we encourage Chamber members to participate in the online survey. All responses are anonymous so you can speak freely (if you wish to speak openly and directly to policy makers you should consider attending our Area Council Meetings). We analyse this data to create the QES report which is then sent to key government departments and financial institutions such as The Treasury and The Bank of England. The QES Report is also a very useful resource to inform your own business. To have your say please compete the survey here.

Why Mid Yorkshire Chamber?

The Mid Yorkshire Chamber and British Chambers of Commerce not only have the ears of policy makers but actively lobby government and demand a response. We regularly speak out through the media, both locally and nationally, on these issues because we are the voice of the British business community.

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