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East Midlands Chamber News

Economy finally moving in the right direction again, says East Midlands Chamber – but skills warning must be heeded

Responding to the latest data from the Office for National Statistics showing UK GDP grew by 4.8% between April and June 2021, East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire) deputy chief executive Diane Beresford said: “After the struggles of the past 18 months, it’s very encouraging to see the economy finally moving in a positive direction.

“This period represents the easing of lockdown as stages two and three of the Government’s roadmap were implemented, with consumers responding with enthusiasm as pent-up demand was unleashed on the hospitality and retail industries in particular.

“The headline national figures are reflected at a local level too, as our Quarterly Economic Survey for Q2 2021 found business confidence in the East Midlands bounced back strongly – with sales, recruitment and investment all increasingly significantly.

“Our State of the Economy Index – a measure of the region’s economic health compiled by aggregating various indicators – reached its highest level since Q3 2018 as the steady recovery was replaced with big growth expectations.

“We would expect the trajectory to continue improving in the next set of results as almost all restrictions were lifted in July and large-scale events finally return along with other businesses that had been forced to close since March 2020.

“However, the fact the growth falls just shy of the 5% predicted by the Bank of England suggests that lingering issues, such as the ‘pingdemic’ in which huge numbers of people have been forced to self-isolate for lengthy periods, has continued to affect businesses with regards to both their workforce and customer base.

“And with the economy still 4.4% smaller than it was before the pandemic, now is not the time to get complacent in our approach to the economy. While we are gradually returning to a sense of normality, many companies still require financial support while consumer confidence slowly returns.

“The skills gap is another issue we keep hearing about from the businesses we represent. Six in 10 respondents in our QES said they attempted to recruit in the second quarter, yet 62% of those struggled to fill roles across a range of skillsets.

“So despite the positive direction we’re heading in at a macro level, this suggests it’s not all plain-sailing for individual businesses and the Government must be prepared to continue offering support, particularly for those sectors that are finding it particularly difficult such as transport and logistics.”