Confidence rising for St Helens businesses but recruitment still a challenge

St Helens businesses have shown concerns over rising inflation rates and cost of raw materials pressure.

The latest Quarterly Economic Survey for Q2 by St Helens Chamber has shown the greatest improvements since the start of the pandemic across a number of key indicators, including increases in domestic sales, attempted recruitment and expected workforce growth in Q3.

While the findings show encouraging signs, the survey was completed before the announcement over the extension of lockdown measures in June and these are improvements on the lowest base on record.

This quarter businesses have shared their concerns over anticipated rises in inflation, which have risen dramatically, especially amongst manufacturers.

This, coupled with significant increases, and in some instances even shortages, in the supply of raw materials (cited by 73% of local firms) has pressured firms to increase their prices, with almost 60% of businesses now saying they will expect to increase them in the next three months.

This quarter has also highlighted the significant difficulties local businesses are facing with recruitment.

Whilst just over 12% of businesses have increased their workforce in the last quarter, just shy of 32% of St Helens businesses attempted to recruit. 75% of firms who attempted to recruit reported experiencing difficulties in finding suitable staff.

This issue is being reflected across the country and it rises in some sectors, including the hospitality industry (81%), which as the hardest hit sector by the pandemic should now be starting on the road to recovery, but is being held back by recruitment difficulties.

Rachel Collins, Head of Business Services at St Helens Chamber, said: “Despite a positive set of results, with some indicators approaching pre-pandemic levels and business confidence increasingly on the rise (64% now forecasting growth in the next 12 months), businesses are still being held back by factors outside their control.

“ONS data showed over 6600 people in St Helens claiming unemployment benefits as recently as mid-June so the recruitment difficulties being felt are hard to understand.

“We hope that our upcoming Jobs Fair event will help to connect businesses with a pool of potential new recruits and help to fill some of the vacancies they are struggling with.

“As a Chamber network we are calling on the Government to take urgent action to review and resolve the situation.

“The anxieties over inflation are now at a record high so we are urging on the Treasury to lock-in inflation rates and remove this unnecessary concern which could potentially de-rail recovery and investment plans.

“If the government wants to see its plan to ‘Build Back Better’ come to fruition, then it needs to urgently address the spiralling increases in raw material costs, which in some cases are reported as being as high as 25%. The UK urgently needs more favourable trade deals securing if our manufacturers and construction businesses are going to be able to thrive.”