Pent up demand delivers early promise as region emerges from lockdown
Signs of an early recovery were plentiful in the latest edition of the regional Chamber of Commerce Quarterly Economic Survey. The survey of businesses, which was conducted as the nation began a gradual release from restrictions, found signs of cautious optimism returning across most sectors.
Firms reported a surge in domestic sales activities as pent-up demand was unleashed following a relaxing of restrictions from April. International sales remain subdued for many however, though stronger forward orders suggest the impact of these challenges may dissipate.
Speaking on this quarter’s findings, Nick Garthwaite, Chair of West & North Yorkshire Chamber said:
“There is significantly more positivity this quarter with nearly all of our measures on an upwards trajectory, domestic sales rebounded, investment intentions also more positive and there is strong evidence that employment is increasing across the region.
“However, there are some areas which we need to be mindful of, notably international sales activities remain subdued as trade with the EU continues to challenge firms. We also report significant increases in costs, driven largely by increasing prices for haulage and shipping along with raw material shortages driving up prices. Firms are increasingly expected to pass on these costs in the form of price increases.
“We must also be mindful of the high levels indebtedness racked up by firms over the last year, and as loan repayments become due over the coming months this may put strain on sustaining the current levels of growth”
Martin Hathaway, managing director of the Mid Yorkshire Chamber of Commerce said of the Q2 report:
“Despite ongoing challenges and disruption, the results of the quarter two survey are promising, as we continue to emerge from restrictions, and show that employment and investment intentions are on the rise.
“However, hospitality, events, travel and many more industries are still having to work tirelessly to keep their businesses afloat and continue trading, with many still facing major disruption, confusion and stress. UK manufacturers have also experienced increased pressures over the last quarter, caused partly by massive rises in haulage costs and shortages in sourcing components, raw materials and construction products.
“We must not forget the sectors that are still facing challenges, especially as more and more are able to reopen and return to ‘business as usual’. There is still much more to be done and we hope that, in quarter three and beyond, our businesses can continue to recover and flourish.
“We look forward to nurturing and supporting a more resilient, more determined workforce after the events of the last 18 months.”
Sir Roger Marsh OBE DL, Chair, Leeds City Region Enterprise Partnership and Chair, NP11, said, “As we look forward to the lifting of all COVID restrictions and the economy reopening further, businesses are indicating increased confidence for the quarter ahead. Both manufacturing and service sectors have continued on an upward curve since the last report, with confidence in turnover and profits higher than pre-COVID levels for the first time.
“Confidence has been aided by a surge in domestic sales across all industries. Demand has been growing steadily since the end of 2020 with a significant increase reported in this quarter following months of pent-up demand. While this is great news, businesses – particularly within the manufacturing sector, have reported significant increases in input costs, the repercussions of which are yet to be felt.”
Read the full Q2 Quarterly Economic Survey
