The latest data shows strong performance from Yorkshire based services providers, but on the flip side, demand for manufactured goods saw a significant slowdown.
Employer confidence in the region and the rest of the country has fallen with uncertainty over the Omicron variant looming.
Heather Waters, Member of the NatWest North Regional Board, commented: “the survey did highlight some worrying trends beneath the bonnet. The biggest concern is regarding the wide divergence in performance by sector.
Activity growth in November was wholly driven by services, as manufacturing output was broadly stagnant. This pins the fate of the broader recovery in a precarious position as continued growth is dependent on one part of the economy given that the supply-related disruptions impeding manufacturers don't look like fading any time soon."
In a recent report by the Recruitment & Employment Confederation (REC), data shows that employer confidence in the UK’s economy has wavered as uncertainty looms about the Omicron variant. Having said that it is good news to see that businesses continue to remain positive about making hiring and investment decisions when asked in the survey.
The region’s businesses recorded its fastest rise in operating expenses since 1997 with rates increasing for both service providers and manufacturers. The data points towards rising energy and transport costs meant price increases for a wide range of raw materials.
In a response to this, private sector companies have hiked prices up for goods and services – the increase is the steepest on record, even surpassing the previous high in October 2021.
Services sectors recorded strong performance, these included transport & communication, hotels & restaurants, financial intermediation and business-to-business services. Computing & IT also saw a considerable rise in activity, which can be attributed to charging increased prices for services.
Manufacturing sectors such as textiles & clothing, wood & paper and electrical saw a decrease in output.
Impact of furlough scheme
Over 1.1 million people or 4% of the UK’s workforce were on the furlough scheme when it ended in 30 September 2021 and there were significant concerns over the impact of ending the scheme.
It appears that, there has not been much of a change for employers when asked if the availability of candidates for vacant roles has changed over this time.
In fact, according to the data more employers have seen a reduction in the number of appropriate candidates for their vacancies instead of an increase, which is what experts initially predicted.
It is difficult to predict the economic outlook for 2022 – this time of year is typically unpredictable with the majority of sectors shut down for different periods. There is also not yet a clear picture for employers until we see what the level of bounce back following the Christmas break.
The current situation is exasperated by the pandemic the government recently said that we could expect up to 25% of an organisations workforce could be off work due to the coronavirus. We suspect by end of Q1 2022 we will start to see an increase in employers making business decisions regarding their workforce.
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