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Economic bulletin

COVID-19 has been devasting for economies across the country.  The economic support measures that we have put in place in Staffordshire as a partnership, alongside those made by government, have had a positive impact, but the next few months will be challenging.

Despite the challenges ahead, Staffordshire can still achieve its potential as a thriving powerhouse economy on the international stage by not just recovering, but renewing. Our five-year Economic Recovery and Renewal Strategy (2.4 MB) outlines how we will seek to make this happen. To effectively respond to those challenges we must all be able to see behind the headlines and understand the full picture - the monthly Economic Bulletin does just that.

Latest edition

Edition 18 (2.33MB)

Welcome to the latest edition of the Staffordshire & Stoke-on-Trent Economic Bulletin produced by our Economy, Skills and Insight Teams, which provides the timeliest secondary data available on what is happening with the local economy. However, this clearly only provides part of the picture and we continue to build up our softer intelligence to provide a better indication of what is happening on the ground, including the local response to the COVID-19 crisis and subsequent recovery.

Alongside information on the Claimant Count and Job Vacancies that will be a part of every Bulletin. This month’s issue also provides more detailed youth claimant count analysis and updated ward level analysis of the claimant count to help identify areas which have been impacted the hardest across Staffordshire & Stoke-on-Trent and where there may be a greater need for support. We also provide analysis of the latest business insolvency data to further understand how businesses have been impacted by COVID and the influence that Government measures have had on company and individual insolvencies.

We hope you find the Bulletin useful and welcome your comments and suggestions on further information you would like to see included in future editions. If you do have any feedback please send your comments to Darren Farmer, Economy & Skills Analyst at darren.farmer@staffordshire.gov.uk.

Stay Safe,

Darryl Eyers

Director for Economy, Infrastructure and Skills, Staffordshire County Council

 

Key messages from edition 18

  • Over the last month we have seen the rapid spread of the Omicron variant of COVID-19 across the UK and other countries causing a number of health and economy related challenges.
  • This wave of COVID is different to previous waves, in that the infection rates have reached record levels at around three times higher than the previous peak this time last year, but the levels of hospitalisation are currently about half experienced at that time (19 per 100,000 compared to 36 per 100,000 in January 2021), and deaths are much lower as well.
  • Positively the latest data shows that cases are starting to fall and hospital admissions have plateaued due to the high levels of immunity and a number of scientific advisors are now predicting that COVID will soon settle down to normal endemic patterns of spread seen with other infections.
  • However, there still remains a clear need for people to get vaccinated, get tested and self-isolate if needed, in order to prevent any unnecessary spread of Omicron, limiting pressure on the NHS through hospitalisations and avoiding unnecessary deaths this winter.
  • The Prime Minister is now drawing up plans for how the UK will ‘learn to live with COVID-19’, with measures expected to include a winding down of the testing regime, with free lateral flow tests ended for all but the most high-risk settings and the possible removal of the requirement to self-isolate.
  • As a result of the Omicron surge in infections a number of sectors have been hit by cancellations with musicals, plays and pantos cancelled at a time of the year when revenue is usually at its highest alongside leisure and hospitality seeing significant cancellations due to consumer fears. High street retail has also been impacted with declining high street footfall around Christmas – in week to 2nd Jan 2022 UK retail footfall 75% of pre-COVID 2019 level.
  • To support such Covid-hit businesses the Chancellor has set out a £1 billion fund where hospitality businesses such as pubs and restaurants will be able to apply for cash grants of up to £6,000 per premises.
  • As well as trade being impacted there are also increasing concerns regarding staff shortages due to isolation, particularly in health and social care, schools, nurseries, pubs, shops, restaurants and council services which could see services impacted or businesses having to close.
  • In terms of the wider economy, we saw the UK economy bounce back to pre-pandemic levels in November, with GDP rising by 0.9 per cent and the economy 0.7 per cent larger than in February 2020. However, the outbreak of the Omicron variant of COVID-19 is likely to have impacted this increase in December and into January 2022.
  • Bank of England warned that the new variant poses a risk to the British economy and there are concerns that the increase in National Insurance contributions in April by 1.25 per cent and plans to put up corporation tax in 2023 are at the wrong time.
  • Inflation surged more than expected to its highest level in more than a decade in December rising to 5.4 per cent, up from 5.1 per cent in November. It means inflation has jumped by 3.4 percentage points in the space of just five months – the fastest rise on record. The Bank of England predicts inflation could rise as high as 7 per cent, a level not seen since 1991.
  • Interest rates have increased to 0.25 per cent from 0.1 per cent, a rise for the first time in more than three years. The Bank of England’s move came despite fears that the Omicron variant could slow the economy.
  • The rise in inflation and interest rates comes at the same time as continuing concerns regarding significant increases in energy prices with warnings that bills could soar to a record £2,000 a year from April, with the regulator set to increase the price cap by more than 50 per cent, due to a global shortage of gas supplies.
  • Rising inflation, taxes, interest rates and energy prices all adds up to many household facing a cost of living crisis with The Resolution Foundation estimating that on average every home is set for a £1,200 increase in bills this year.
  • More positively fears of rising unemployment have been largely unfounded, but furlough was high and vacancies remain high. Economic participation has taken a hit – particularly through younger and older workers leaving the labour force.
  • The number of payrolled employees in November 2021 was 29.4 million employees in the UK, up 257,000 on the revised October 2021 level and up 424,000 on the pre-coronavirus (COVID-19) February 2020 level.
  • The latest Labour Force Survey estimates for August to October 2021 show the employment rate increased by 0.2 percentage points on the quarter, to 75.5%.
  • The unemployment rate decreased by 0.4 percentage points on the quarter to 4.2% while the inactivity rate increased by 0.1 percentage points to 21.2%, with younger and older workers particularly leaving the labour force.
  • The number of UK job vacancies hit another record high in the October to December period, with 1.24 million openings during this period, which was 462,000 higher compared to the three months before the pandemic, although growth is slowing and came as the overall unemployment rate edged downwards and more young and part time workers found jobs.
  • Looking locally, the claimant count in Staffordshire saw a further decrease of 360 claimants between November and December 2021 to a total of 17,035 claimants, which was a higher proportional decline than seen regionally and nationally. The claimant rate has remained at 3.2% of the working age population in December, well below the national rate of 4.5. This reflects the continued recovery in the labour market with more businesses able to fully reopen and the end of furlough where more workers have been able to return to their place of work full-time alongside record levels of recruitment to support businesses in their recovery and growth and the increase in seasonal jobs to support Christmas trade.
  • The proportion of young people in Staffordshire aged 18-24 that are claiming work-related Universal Credit currently stands at 4.5% compared to 3.7% in March 2020 and still well above the rate for the working age population. Encouragingly this month Staffordshire has seen a further decrease in the youth claimant count with a decline of 160 to a total of 2,935, reflective of more young people being able to return to work in hardest hit sectors such as retail and hospitality and the record levels of job vacancies currently available.
  • The overall number of company insolvencies increased by 88% in November 2021 when compared to the same month last year and is now 11% higher than two years previously.We have seen a rapid increase over recent months with levels now above pre-COVID due at least in part to government support measures which were put in place to reduce insolvencies in response to the pandemic now either ended or reduced. The main concern is a continued rise in company and individual insolvencies now that Government support has at least partly been withdrawn and associated issues such as homelessness.
  • As seen nationally, in December we continued to see an increase in job vacancies in Stoke-on-Trent and Staffordshire, however the increase is slowing. This is reflective of the increasing demand we are seeing for workers across most parts of the economy to aid the recovery from the pandemic which has been further heightened by seasonal job opportunities. Staffordshire saw vacancies increase by 1% between November and December equivalent to over 400 more job vacancies, this was in-line with the increase seen nationally. Stoke-on-Trent saw no change in the number of vacancies in December compared to November.
  • The occupations to see the most significant increases during December continue to be roles in sectors experiencing recruitment difficulties and sectors which have been able to open up further due to reduced restrictions and occupations which support them including education, logistics, manufacturing, health and social care, and retail.
  • It is clear that there are a record number of jobs available in the local economy and the need now is to ensure that there is a strong local labour pool with skilled workers able to fill these roles to support business recovery. The national and local support which is in place to support those that have been unfortunate enough to lose their jobs is vital in both reskilling and upskilling as well as enabling them to access the opportunities available.
  • Staffordshire and Stoke-on-Trent businesses that have been turned down by other lenders can now apply to the Staffordshire and Stoke-on-Trent Business Loan Fund, supporting businesses to grow through affordable, unsecured loans from £10,000 to £50,000. To find out more visit here.
  • Staffordshire Means Back to Business Scheme ‘To Thrive’ Grants of up to £5,000 are now available to Staffordshire small businesses from the partnership scheme that brings together funding from the county council and district and borough councils to help businesses to thrive through the pandemic.
  • Alongside this there is support available through the Growth Hub and we have our start-up schemes and the Redundancy and Recruitment Triage Service.
  • To ensure residents have access to the support needed to find employment there are several employment and skills programmes which they can access including the Kickstart Scheme and Restart Scheme.
  • Staffordshire County Council has announced a new support programme, the Get Started Scheme for people looking to start their own business or who may have recently done so. It aims to give participants extra confidence to launch or continue with their enterprise with the backing of free expert professional support. This will involve accessing the services of appointed marketing and accountancy professionals allowing entrepreneurs to test their business model through branding packages, market testing, website guidance and financial packages to predict profitability or to create a brand or website presence for their business.
  • In conclusion, the Omicron variant has been a further set-back to economic recovery with issues including worker isolation leading to labour and skills shortages, reduced consumer confidence during key period for many businesses with declining high street footfall around Christmas, and home working impacting town and city centres footfall and spending. Given the impact of Omicron there are concerns that the increase in National Insurance contributions in April and plans to put up corporation tax in 2023 are at the wrong time. There is also the ongoing concern regarding the surge in inflation to its highest level in more than a decade and the expectation that it is likely to rise further over the coming months. The COVID-19 lockdowns pushed an estimated 900,000 people into poverty with cost-of-living pressures including rising fuel cost, energy bills, taxes and interest payments likely to see this figure rise further. However, the labour market continues to recover with more people finding work while there remain record numbers of job vacancies for those that have lost work during the pandemic. Efforts need to continue on ensuring that local residents have the skills required by local businesses to fill in demand roles and support further economic recovery, innovation and growth.
  • It is vital that additional support such as the Additional Restrictions Grant and Staffordshire Means Back to Business Programme is utilised to help businesses transition to new business models including diversification and digitisation to improve their viability and sustainability. Alongside this the Kickstart and Restart Schemes have an important role to play in ensuring that local residents have the skills and training needed within the local economy to support increased growth, productivity, and prosperity. Reskilling and upskilling residents from declining sectors into priority growth areas of the economy such as digital, green, advanced manufacturing, advanced logistics, construction, and health and social care will be key.

Earlier editions

Edition 1 (1.63 MB)

Edition 2 (996 KB)

Edition 3 (987 KB) 

Edition 4 (1.1 MB)

Edition 5 (1.2 MB)

Edition 6 (1.1 MB)

Edition 7 (1.6 MB)

Edition 8 (1.4 MB)

Edition 9 (2.1 MB) 

Edition 10 (1.6 MB)

Edition 11 (2 MB)

Edition 12 (2 MB)

Edition 13 (1.55 MB)

Edition 14 (2.2 MB)

Edition 15 (1.57 MB)

Edition 16 (2.14 MB)

Edition 17 (2.64 MB)

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