Chamber: Momentum being lost in economic recovery by supply chain issues and skills shortages

The Chief Executive of the East Midlands Chamber has commented on the latest figures from the Office of National Statistics which show that UK GDP grew by 1.3% in the three months to September 2021.

Scott Knowles said: “After national output grew by 5.5% in the three months to June, the latest figures show our economic recovery has slowed sharply despite Covid-19 lockdown restrictions being almost fully lifted during this period.

“This reflects the challenges many businesses have faced in terms of supply constraints, rising energy prices and staff shortages, which have led to a decline in output for many sectors, including manufacturing and construction, as their ability to complete orders has been weakened. 

“These trends have been keenly felt in the East Midlands, with the Chamber’s Quarterly Economic Survey for Q3 2021 showing there are major skills gaps in the region – two-thirds (67%) of companies attempted recruitment in the previous quarter and, of these, 71% said they faced problems with hiring the right people.

“It’s not all bad news, with the ONS figures showing the hospitality and leisure sectors rebounded well, but with business investment remaining short of pre-pandemic levels, it limits our ability to raise productivity and deliver a sustainably high-wage economy. This will also be hampered by the Government adding extra financial burdens on to businesses in the form of rising national insurance contributions.

“The UK’s GDP remains 2.1% below pre-Covid levels in Q4 2019 and we are in real danger of losing momentum in the economic recovery if we don’t address these underlying structural problems quickly.”