Commenting on the latest forecasts by the Office for Budget Responsibility, Suren Thiru, Head of Economics at the BCC, said:
“The OBR’s latest forecasts paint a bleak picture of the UK’s economic prospects over the near-term as the drag effect of rising inflation, supply chain disruption and higher taxes weakens key drivers of UK output.
“The robust forecast for business investment looks too optimistic with rising cost pressures, higher taxes and a deteriorating economic outlook likely to dampen investment intentions by more than the OBR’s latest projections suggest.
“The OBR has also confirmed that the UK’s fiscal outlook has improved since the Autumn Budget, despite a sharp uptick in debt interest payments. This leaves the chancellor with more than enough fiscal headroom to better support households and businesses through this difficult period.”
King’s Lynn will launch a colourful trail of model spitfires in the town this Saturday, 11 July. There will be 24 spitfire sculptures, which will form a ‘flight path’ through the old town.
Each spitfire is sponsored and decorated by local organisations and businesses. The project has been co-ordinated by the air cadets from the 42F (King’s Lynn) Squadron Air Training Corps. Visitors will be able to view the trail until the end of September.
Heather Garrod, President of West Norfolk Chamber Council said:
“King’s Lynn has a wealth of historical heritage on which to capitalise. The excellent sound and light shows have attracted many visitors and increased footfall in the town centre, which has benefitted the businesses based there. Together with the recent Hanse business convention and festival in May, helping to increase business awareness of the trading opportunities, this has all firmly put King’s Lynn on the map for both business and tourism.”
“It is hoped that the Air Cadet’s Spitfire Trail will prove to be just as successful and popular as the GoGo Gorrillas trail held last year, and the current GoGo Dragons Trail in Norwich. The Spitfire Trail will not only celebrate the Battle of Britain, but it will help boost visitor numbers to the town centre and contribute further to the local economy.”
The British Chambers of Commerce Quarterly Economic Survey (QES) is used by the Bank of England and the Chancellor to plan the future of the UK economy and over 7,000 businesses across the UK take part.
The Q2 2015 results for Norfolk pointed to continued moderate growth in the local economy over the next year. It was encouraging to see that several of Norfolk balances positively ‘bucked’ the national trend, with some results being stronger than the national balances, compared to the last quarter. However concerns over the EU and the possibility of Grexit are still causing some uncertainty within the business community and the impact of the reduced oil prices are being felt locally.
The previousQ2 QES results identified that the majority of Norfolk businesses continue to remain positive. Both the service and manufacturing sector continued to strengthen their exports, but there were some concerns about investment in plant, machinery and training and also recruitment difficulties, particularly in the manufacturing sector.
Are you more confident about your business? Have you had difficulty in recruiting new staff or have your got plans to invest in plant, machinery and training? Let us know by taking part in this important economic survey.
The survey takes less than 3 minutes to complete, so please take the time to input into this survey to ensure Norfolk has a voice. The survey needs to be completed online by Monday 14 September 2015.
• UK GDP growth is to halve this year amid inflation, tax rises, and global headwinds
• Consumer spending downgraded with inflation to outpace wage growth until 2024
• UK inflation to rise to 8% with interest rate rises expected to double this year
UK’s economic growth forecasts downgraded…
The British Chambers of Commerce has downgraded its expectations for UK GDP growth in 2022 to 3.6%, from 4.2% in its previous forecast in December 2021 and less than half the growth of 7.5% recorded last year. Following Q4 2021 growth of 1.0%, quarter-on-quarter GDP growth is forecast to slow to 0.7% in Q1 2022, then to 0.2% in Q2 and 0.1% growth in Q3. The downgrade largely reflects a deteriorating outlook for consumer spending and a weaker than expected rebound in business investment, amid soaring inflation, major tax rises, and the impact Russia’s invasion of Ukraine. Following forecasted GDP growth of 3.6% this year, UK economic growth is expected to slow sharply again to 1.3% in 2023, before easing to 1.2% in 2024.
…largely reflecting a weakening outlook for consumer spending and business investment… Consumer spending is forecast to grow at 4.4% in 2022, down from its previous forecast of 6.9%. The downgrade reflects the historic squeeze on household real incomes from high inflation. Inflation is projected to outpace wage growth until Q2 2024, maintaining the squeeze on household finances. Business investment is forecast to grow at 3.5% in 2022, down from the previous forecast of 5.1% The downgrade reflects the expected weakening in investment intentions from rising cost pressures, higher taxes and weakening confidence amid deteriorating UK and global outlooks, including the current impact of Russia’s invasion of Ukraine.
…and inflation forecast to rise 8% this year.
Rising raw material costs, the increase in the energy price cap, the reversal of the hospitality VAT cut and upward pressure on energy and commodity prices from the current impact of the Russian invasion are expected to lift CPI inflation to a peak of 8% in Q2 2022. If realised this would be the highest rate since July 1991. Rising raw material costs and the impact of Russia’s invasion of Ukraine are also projected to keep UK inflation higher for longer. CPI inflation is expected to fall back to the Bank of England’s 2% target in Q4 2024, over a year later than the previous forecast of Q2 2023.
“Our latest forecast signals a significant deterioration in UK’s economic outlook. The UK economy is forecast to run out of steam in the coming months as the suffocating effect of rising inflation, supply chain disruption and higher taxes weaken key drivers of UK output, including consumer spending and business investment. Russia’s invasion of Ukraine is like to weigh on activity by exacerbating the current inflationary squeeze on consumers and businesses and increasing bottlenecks in global supply chains.
The BCC’ latest outlook suggests a legacy of Covid, and Brexit is an increasingly unbalanced economy with a growing reliance on household spending to drive growth. Such economic imbalances leave the UK more exposed to economic shocks and reduces our productive potential.
The downside risks to the outlook are increasing. Russia’s invasion of Ukraine could drive a renewed economic downturn if it stalls activity by triggering a sustained dislocation of supply chains or a more significant inflationary surge. Tightening monetary and fiscal policy too aggressively risks weakening UK’s growth prospects further by undermining confidence and damaging household and firm’s finances.”
Suren Thiru, Head of Economics, British Chambers of Commerce
Norwich City Council have released their latest economic barometer. The report highlighted:
Locally
Lotus, based at Hethel outside Norwich, has unveiled its best annual global retail sales performance since 2011.
Ashtons Legal, one of the region’s largest law firms, is to acquire Norfolk-based Steeles Law in a merger which will increase its team to 400 people. The combination will add Steeles’ office in Diss, to Ashtons’ existing offices in Norwich, Bury St Edmunds, Cambridge, Ipswich and Leeds.
Business sentiment improved in December and employment levels rose at a faster pace as private firms in the East of England stayed confident about higher activity levels in 2022.
Manufacturing exports from the region could rise significantly over the next decade if plans by firms to sell more goods overseas materialise according to a new study – The Export Dividend – from Barclays Corporate Banking.
Nationally
The UK economy grew more slowly than previously thought in the third quarter, suggesting a shaky recovery even before the outbreak of the Omicron variant.
December PMI data pointed to another solid increase in business activity across the UK construction sector, but the rate of expansion slipped to its lowest since September.
UK households have suffered the sharpest fall in the amount of cash they have available to spend for almost eight years, amid a worsening cost of living crisis driven by high 5 inflation and rising energy bills.
The number of insolvent businesses in England and Wales rose by 18.7 per cent last month to 1,674, up from 1,410 in October and an increase of 88 per cent on November last year
For full details of the latest economic barometer see below.
The UK has announced new economic sanctions against Russia.
The new sanctions will deny Russia and Belarus access to Most Favoured Nation tariffs for hundreds of their exports and ban UK exports of high-end luxury goods to both countries. The full press release can be viewed here.
In addition, UK Export Finance has announced it will no longer issue any new guarantees, loans and insurance for exports to Russia and Belarus, whilst retaining £3.5 billion of financial support for trade to Ukraine. You can view the press release here.
Upcoming webinars:
HMG officials are hosting two webinars for businesses about the recent changes to UK sanctions relating to Russia.
UK Sanctions relating to Russia: Briefing by UK Government, Thursday 17 March, 13:00 GMT
The webinar will cover; sanctions legislation overview; new sanctions measures: financial, trade and transport; individual and entity designations; and humanitarian issues. Please register via Eventbrite.
UK sanctions against Russia, Thursday 24 March, 14:00 – 15:30 GMT
The webinar will cover; the scope of sanctions, scope and application of trade sanctions; financial sanctions: restrictions and general licenses; the Export Support Service and enforcement of trade sanctions. Further details can be found here, and you can register here.
A reminder – businesses and traders with questions relating to trading with Ukraine, Russia, and Belarus can submit their enquiries to DIT’s Export Support Service by visiting https://www.gov.uk/ask-export-support-team, or calling the helpline using the number 0300 303 8955.
4 out of 5 (78%) firms that attempted to recruit facing difficulties in finding staff
Hospitality, construction, logistics and manufacturing firms most likely to report difficulties (80% or higher) but all sectors have significant issues
Smaller firms reporting increasing wage pressures are making it harder to compete for staff
Latest figures released today by the British Chambers of Commerce show the pressure on firms struggling to recruit staff remains at record high levels. The data for the leading business group’s Quarterly Recruitment Outlook survey for Q1 2022 was drawn from a survey of 5,500 businesses.
Attempted recruitment in Q1 was down slightly with 60% looking to recruit staff (64% in Q4). However, the proportion of firms reporting difficulties filling roles remains at a historical high at 78%, dropping just one percentage point from the previous quarter (79%).
The hospitality sector was facing the most challenging recruitment issues, with 85%, reporting difficulties, up from 83% in Q4 2021. This was closely followed by construction on 83%, logistics on 81% and manufacturers at 80%.
Retail and wholesale firms were the least likely to report difficulties at 69% but the proportions of firms that cannot find the staff they need remains worryingly high.
Views from Business
Firms reported a broad range of issues which contributed to the overall recruitment squeeze – this included disruption due to Covid and a drop in the availability of foreign staff. More firms are also reporting that wage competition is proving disruptive.
“We are finding it difficult to recruit all levels of staff. Applicants are able to choose between several employers as we are all chasing the same people. They feel we are on the edge of the Midlands but still expect Wolverhampton / Birmingham salaries.” Medium sized professional services firm in Shropshire
“We are prepared to pay more for the right people, but there just seems to be no one to employ. If we cannot get staff our service slips drastically because we don’t have enough people to serve our customers.” Micro hospitality firm in Scotland
Responding to the findings, Head of People Policy at the British Chambers of Commerce, Jane Gratton said:
“It’s now harder than ever for businesses to fill job vacancies and there are no signs of improvement. In an increasingly tight labour market, competition for skills is ramping up wage costs, leaving many firms unable to recruit the people they need.
“When combined with the escalating price of energy, shipping, raw materials and other costs, it is a precarious situation for businesses. Inevitably, it is the smaller firms, with little in the way of cash reserves after two years of pandemic, who are most exposed to the risk all this presents.
“The UK government needs to take concrete action to address labour shortages as they are a key factor in the economy’s stuttering recovery. If firms cannot get the people they need then productivity and revenue are two of the first casualties.
“Government must also ensure that people can access rapid retraining opportunities for in-demand jobs at all skill levels in the workforce. At the same time, where there is clear evidence of national shortages damaging the economy, we need temporary visas for hard working people willing to come to the UK to work in the essential every-day roles that we all rely on.
“Businesses are investing more in developing home grown talent – and creating a more inclusive and diverse workforce – but this won’t solve pervasive skills shortages overnight. Right now, the priority has to be to improve access to skills and ease the wider cost pressures facing business.”
Proportion of UK exporters reporting increased export sales (29%) was largely unchanged for the 4th quarter running
Proportion reporting decreased sales historically high at 25%, also little changed since 1 year ago in Q1 2021
Exporters more likely that non-exporters to expect increases to their prices in coming months
A survey of over 2,700 UK exporters has revealed that export sales growth has been effectively stagnant for the past year. The BCC’s quarterly Trade Confidence Outlook showed the proportion of exporters reporting increased overseas sales to be unchanged from Q4 at 29%, while those reporting a decrease rose 1 point to 25%.
The data showed that manufacturers were more likely to report increased export sales than either business to business service firms (such as lawyers or accountants) or business to consumer service firms (like online clothing stores).
In past 3 months exports sales have…
Exporting manufacturers
Exporting B2B Services
Exporting B2C Services
Increased
32%
26%
26%
Remained constant
42%
56%
42%
Decreased
26%
17%
32%
Conversely, B2B service exporters were more likely than either manufacturers or B2C service exporters to expect profitability to increase in the coming year.
Over the next 12 months, do you believe your profitability will…
Exporting manufacturers
Exporting B2B Services
Exporting B2C Services
Increased
44%
55%
45%
Remained constant
29%
29%
30%
Decreased
27%
16%
24%
Responding to the findings, Head of Trade Policy at the British Chambers of Commerce, William Bain said:
“This data confirms our concerns – that for the last year there was a broadly flat picture for UK exports. This is in contrast with the performance of our near neighbours, with Germany’s exports both within and outside the Single Market steaming ahead by double digit margins and with trade losses from the pandemic already effectively recovered.
“UK exporters are facing the headwinds of higher red tape costs from trading with the EU, raised raw material pressures, and ongoing issues in global shipping markets. If we are to realise the aspirations of the UK Government’s Export Strategy then 2022 has to be the year where these structural factors holding back our exporters are addressed.
“Sustained export growth should be powering our economic recovery from the pandemic. Chambers and their members are already working hard to increase exports but need more substantive measures from Government now.”
We were delighted to be part of the launch of Thetford’s Business Awards launch. This prestigious event is now in its third year.
The Launch was a Co.llaboration with the Award Founders and the Norfolk Chambers, and held on April 21st and hosted at the award-winning Thomas Paine Hotel in Thetford. The hotel is reputed to be the birthplace of Thomas Paine the celebrated free thinker and campaigner of the 18th century who wrote the Rights of Man, on which the American Constitution is based.
The evening of canapes and Co.nnections was a celebration of this year’s launch, with guest speakers Daniel Mayhew and Matt Morton.
Daniel started his career in sales in the mobile phone industry. He quickly became successful by the age of 20. In the years to follow, Daniel became a worldwide leader with Fintech & Ecommerce Eco-System. Working for UK, Israeli, American, and other international businesses, specialising in Cross Border Payments, E-Commerce, GTM Strategy, and Commercialisation. and, an experienced entrepreneur specialising in sales, relationship management, and strategy. His career boasts a successful track record across both ideation & implementation helping brands to achieve huge growth in the health, fitness, sports & technology industries. In his early career, he cut his teeth working for some of the biggest brands in their field such as Grant Thornton and Life Fitness but where he really excelled and thrived was the fast-paced and creative world of start-up & SME.
Matt is an experienced entrepreneur specialising in sales, relationship management, and strategy. His career boasts a successful track record across both ideation & implementation helping brands to achieve huge growth in the health, fitness, sports & technology industries. In his early career, he cut his teeth working for some of the biggest brands in their field such as Grant Thornton and Life Fitness but where he really excelled and thrived was the fast-paced and creative world of start-up & SME. He has set up, scaled, and managed sales teams both locally and globally.
Our Connector, Andrea Wilson, Account Manager and Energiser, Amy Wright, Events Manager attended and networked with local Breckland businesses and Chamber members.
With thanks to Gez Chetal FMBII, Executive Director of the Thomas Paine Hotel and his staff for a very warm welcome and incredible hospitality.
All photographs are credited to Thetford Photography
Our Biker Breakfast Co.llaboration with Westcotec has been in the diary since spring 2020, so it was only fitting that two years later this long-awaited event could finally happen under glorious sunshine at the beautiful Barnham Broom Hotel.
The breakfast started with networking, teas, and coffee amongst an array of helmets and chatter. Chris Sargisson, Norfolk Chambers CEO welcomed our guests and explained that “this event is an opportunity for us to say thank you, where thank you is needed to be said. The Biker community stepped up to the challenge during the pandemic and showed genuine community spirit, supporting the NHS, care homes, and delivering to those in need”.
Chris Spinks, CEO of Westcotec said, “We’re proud to sponsor the biker breakfast event and work in Co.llaboration with Norfolk Chambers”. Chris spoke of his previous career within the Norfolk and Suffolk Constabulary and seeing firsthand the results of not following road safety.
We also heard from Andy Lawer, part of the Safe Rider Scheme within the Norfolk Constabulary. Andy spent 20 years riding Police bikes in London, before moving to Norfolk. He has worked for NATO, escorting PMs and dignitaries, and members of the royal family. He spoke of the superb training he received as an advanced rider and elements of the role, “it’s about educating riders and talking, and asking if they (the riders) can see, that what they are doing isn’t right”.
“We take the guidelines we’re given, we pass them on to the public and it makes people safer on the road. Above all, we want people to thoroughly enjoy riding, and then get home safe”.
Following a delicious breakfast, we heard from Lydia McClintock, Manager of Infinity Norwich. Lydia talked of the improvements and developments to safety rider wear, showing examples with new custom clothing, and grading standards, and talked of new certifications coming into play to enhance rider safety.
Our event charity was Nelson’s Journey, with guest speaker Gary Stevens. Nelson’s Journey is an incredible charity.
Nelson’s Journey supports children and young people in Norfolk who’ve experienced the death of a significant person. We provide a range of resources and services, and accept referrals from families and professionals for those who may need our support. Since 1997, Nelson’s Journey has helped thousands of bereaved children and young people in the county. It is thanks to the tremendous support of our local community that our work is possible.
Finally, Tim James, Design and Development Engineer at Westcotec closed the event, with a run-through of the route back to Norwich.
The British Chambers of Commerce is calling for an immediate emergency budget to deal with the costs crises facing businesses and people throughout the country.
It has developed a three-point action plan that would allow firms to keep a lid on rising prices, boost productivity and ease cost pressures.
The proposals include:
Ease upfront costs of doing business by reversing the recently introduced National Insurance increase until at least 2023/24.
Help firms manage the impact of rising energy prices by cutting VAT on their energy bills from 20% to 5% for a minimum of one year.
Address labour shortages by reinstating free Covid tests for companies to ease the strain on productivity caused by persistent high absences
Together the three steps would take the pressure off businesses that are battling to keep the economy afloat and offer a route to higher productivity and tax receipts in the future.
Shevaun Haviland, Director General of the BCC, said:
“These are simple, straightforward measures that can be quickly reversed when the economy is in better shape.
“The Treasury and HMRC have proven their ability during the pandemic to implement similar changes quickly and efficiently. Making these changes would have an immediate benefit for both businesses and the public.
“The costs crises facing firms and people in the street are two sides of the same coin. If we can ease the pressure on businesses then they can keep a lid on the price rises being driven by surging energy bills, staff shortages and higher taxes.
“Firms will then have the breathing space they need to raise productivity and strengthen the economy. But a change of course is needed now, if the government does not act immediately then rising costs will put our economic recovery in a stranglehold that will have repercussions for years to come.
“The government has a variety of financial levers it can pull, and this is the time to use them. Acting today will then give businesses a chance to create the future profits needed to fill tax coffers.”
The measures in more detail:
Postponing the rise in National Insurance Contributions would not only ease the immediate pressure on companies’ balance sheets but it would also put money back into the pockets of people – boosting consumer confidence. When supply chain disruption has unwound and global factors influencing inflation have receded the economy will then be in a much stronger position to bear the increase.
Cutting VAT on business energy bills to 5%, for all businesses, would provide another quick release valve on soaring costs for firms. For example: a small business which has an energy bill of £10,000 and currently pays the standard 20% rate would pay £2,000 VAT. Our proposal would see that cut to £500. This measure could be adjusted over time to take account of those sectors most in need.
Many businesses in the UK are still seeing above average absence rates as Covid continues to impact the workforce. Around two thirds of more than 1,100 firms surveyed in April by the BCC reported staff absences due to Covid symptoms or self-isolation. Bringing back free testing would allow firms to limit the disease’s spread among employees. With wider structural staff shortages continuing to limit productivity this would be a key measure to keep the economic recovery on track. New sub-variants of Omicron are reportedly leading to rising infection rates in the US and South Africa.
Funding to support innovation within the local Voluntary and Social Enterprise sector was unveiled today as the next round of the £1 million LEP Prize Challenge opened for bids including the West Norfolk area.
The Greater Cambridge Greater Peterborough Enterprise Partnership (LEP) is encouraging charities and social enterprises to help people furthest away from the workplace to gain the skills they need to become job ready and ultimately get back into work.
Grants of £40,000 are available for charities and social enterprises to develop and deliver projects that will tackle worklessness and skill shortages in our area. The funding will support up to seven projects throughout 2016, with the strongest three organisations receiving a further £50,000 to scale up their projects in 2017.
Launched in May 2013, the LEP Prize Challenge has invested £360,000 into the local community, which has so far helped 110 people to gain paid employment and has supported over 300 people to become work-ready. In Round 2, we aim to reach our target of helping 1,000 disadvantaged people and get 250 people back into work.
Jane Darlington, LEP Prize Challenge Panel member and Chief Executive of Cambridgeshire Community Foundation who administer the scheme, said:
“I’m pleased to see the second phase going live to build on the great work already achieved by projects funded under the LEP Prize Challenge. There have been some changes to this phase to build on what was learned in the earlier round.”
