Inflationary pressures and recruitment headaches – Q4 Economic Report

Inflationary pressures and recruitment headaches slowing the pace of recovery

That is the findings in the latest economic report from Chambers of Commerce in West & North Yorkshire. Whilst firms continue to report domestic sales growth there are strong signs that the pace of growth is being slowed by increasing cost pressure and access to skills and talent. Fieldwork was conducted before the surge in the Omicron variant so the full impact of the last month may not be recorded in this data.

Amanda Beresford, Chair of West & North Yorkshire Chamber of Commerce, said of the results: “The crisis has placed extreme pressures on the cash reserves of many regional firms with supply chains still facing the twin challenges of Covid and Brexit and now with intense labour shortages leading to spiralling pay increases as companies try to recruit and retain workers.

“Companies are responding to these extreme inflationary pressures by looking to pass additional costs on to customers in ever greater numbers, with our measure at its highest level in this survey’s 32 year history.

“Despite this manufacturers tell us they are bringing forward new capital investment programmes in ever greater numbers in order to meet the rise in demand.”

Martin Hathaway, MD of Mid-Yorkshire Chamber of Commerce said, “I am pleased to be seeing strong and steady sales growth, within the country, however the ongoing skills shortages and recruitment struggles must be addressed.

“The desire to recruit is there, but firms are struggling to find suitable applicants for the positions.

“Further support is needed to help get people into the right jobs and to make training and development opportunities more accessible.

“This will allow us to grow and enhance our workforce here in Yorkshire as we continue to recover and look ahead to future growth.”

Sir Roger Marsh OBE DL, chair of the Leeds City Region Enterprise Partnership and NP11, said, “The results of the survey point to a continued recovery in demand but with significant supply side constraints which are hampering growth. There are now also the consequences of Plan B that are currently unknown, but it is likely to have a severe impact on parts of the service sector

“Labour shortages continue to be a key concern for businesses as hiring staff is proving challenging. The Combined Authority and LEP have recently implemented a series of new programmes to respond to identified skills and employment needs across West Yorkshire, details can be found on the Leeds City Region LEP website”

Further details and the Chamber’s full QES report can be found online https://www.wnychamber.co.uk/representation/qes/