Economic bulletin

We are ambitious for the economy of Staffordshire, our businesses, and people. The impacts of global events continue to be felt on the local, national, and global economies and cannot be ignored. However, the county council, Government, and our partners, will continue to support Staffordshire’s residents and businesses through challenging times, ensuring we are well-placed to deliver a more resilient, more dynamic and more productive local economy.

Our ambitious Economic Strategy is our roadmap to delivering our ambitions for the Staffordshire economy, where our existing business are helped to grow, new businesses are established and thrive, our residents have the skills needed to access the jobs of the future and our towns across the county are supported to be places we can all be proud of.

To effectively achieve our Economic Strategy priorities and deliver our long-term vision for our economy we need robust ongoing analysis and evidence of the latest economic picture, ensuring that we are aware of any challenges that may arise. The monthly Economic Bulletin forms a key part of our live evidence base.

Latest edition

Edition 32 (2.35 MB)

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 analysis of official Government data, national intelligence and local insights on the state of the local economy.

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 are being impacted the hardest by unemployment and a reliance on work-related benefits 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 are faring during the current economic climate.

Key messages from edition 32

Local Picture

In Staffordshire having seen improvement in the local economy and labour market following the COVID pandemic, we are now continuing to face challenges as a result of the energy and cost-of-living crisis with unemployment, youth unemployment and dependency on work-related benefits continuing to increase.
We continue to hear of local businesses struggling to remain profitable due to a wide range of factors including high energy prices, rising interest rates, increasing wage levels and lower consumer demand. However, we are starting to see small signs of positive improvement with turnover starting to pick up in some businesses and price inflation for some goods and services starting to ease, although it is too early to know if this is the start of a longer-term change in conditions.
Overall, inflation still remains a concern but is expected to fall quickly this year. It is positive news that the UK avoided a recession at the end of last year and the Bank of England are more positive about the future. However, economic recovery remains fragile with the war in Ukraine continuing to overshadow the world economy, generating high uncertainty. It remains clear that we will need to continue to support our communities and businesses through these challenging times.
Looking at the local data in more details, following long-term declines in the claimant count approaching pre-pandemic levels, the number of work-related benefit claimants in Staffordshire has continued to rise this month with a further increase of 910 to a total of 15,715 claimants.
The claimant rate for Staffordshire increased from 2.8% to 3.0%. However, the rate in Staffordshire continues to be one of the lowest rates in the West Midlands and is far lower than the average for the region 5.0% and lower than the average for England of 3.8% of the working age population.
In terms of job vacancies, Staffordshire saw a 2% decrease in the number of available job vacancies between February and March to a total of 19,000, which continues to remain higher than the number of work-related benefit claimants. Stoke-on-Trent saw a 1% decline in vacancies to a total of 8,200 which is below the number of claimants. As reported in previous briefings, this will be reflective of the comparison with the significant rise in job vacancies seen in January following the seasonal effects in the number of job adverts being posted, but it also clearly shows that overall recruitment demand remains strong with new job postings higher than a year before and pre-pandemic levels.
Considering the top 20 job vacancy occupations in Stoke-on-Trent and Staffordshire, demand for roles in social care including ‘care workers and home carers’ remain by far the strongest of all occupations. This is followed by high demand for ‘administrative occupations’, ‘sales related occupations’, ‘nurses’, and ‘customer service occupations’.
There continue to be reports of labour and skills shortages with not enough skilled workers to fill the vacant jobs, especially in social care (both adults and children), nurses, sales and customer service, logistics including storage occupations and van and LGV drivers, hospitality such as kitchen and catering assistants and chefs, engineering, digital/IT roles such as programmers, and teaching assistants.
This has the potential to slow down economic growth and limit business survival unless the labour shortage and skills gap is quickly and effectively addressed. Clearly employment support organisations, skills providers and the Government’s Plan for Jobs including the Restart schemes and new Skills Bootcamps have a vital role in upskilling and reskilling jobseekers into areas of demand and preventing them becoming long-term unemployed. While Government and business sectors have a key role in ensuring that jobs in areas of demand are attracting workers with good pay and terms and conditions to help prevent labour shortages.
It is clear that there continue to be a very high 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/survival and improve their own prosperity through better pay. 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. Also encouraging those that have become economically inactive due to COVID will further help to address labour shortages and skills gaps.
Staffordshire County Council’s new Job Brokerage Service is designed to do exactly this by matching local people, employers and training providers to fill jobs and provide people with the jobs and careers they need.
There are also clear emerging opportunities for job creation in digital (including online retail and e-commerce) and the green economy (including retrofitting homes to improve energy efficiency, electric cars e.g., Jaguar Land Rover and hydrogen e.g., JCB).
We will also look to build on our existing strengths including engineering and advanced manufacturing through the adoption of AI, Automation and Machine Learning, construction to achieve Government house building targets and build major new infrastructure projects such as HS2 and West Midlands Freight Interchange, and advanced logistics with the ecommerce and online retail boom such as the recent announcement of ASOS’s decision to build a £90million distribution centre creating 2,000 jobs close to Cannock and Tamworth were jobs will be very much needed and Pets At Home in Stafford.

Local Initiatives

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.
Applications for Staffordshire Means Back to Business Scheme business loans and grants remain open to small businesses in Staffordshire, including the Get Started and Grow Scheme.
Alongside this there is support available through the Growth Hub and we have our start-up schemes and the Staffordshire Jobs and Careers brokerage service.
The Staffordshire Business and Enterprise Network (SBEN) continues to support local businesses with the transition to Net Zero.
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 Restart Scheme and skills bootcamps.

National Context

This month we have seen further signs of improvement with inflation easing and the UK economy performing better than previously estimated at the end of last year avoiding recession. However, food prices are still rising sharply impacting cost of living and business conditions remain challenging.

Cost of Living Crisis, Inflation and the War in Ukraine

Positively, UK inflation eased last month, falling to 10.1 per cent in the year to March from 10.4 per cent in February, although it was widely expected to fall below 10 per cent.
One of the main factors behind the slowing annual inflation rate was a drop in the price of motor fuels, which fell by 5.9% in the year to March 2023, compared with a rise of 4.6% in February.
Despite the slowing of the overall annual rate, food and non-alcoholic drink prices still rose by 19.2% in the year to March 2023, up from 18.2% in February. The latest figure is the highest increase observed for over 45 years.
Electricity and gas prices also rose by 66.7% and 129.4%, respectively, in the year to March 2023. These prices were also among the main drivers of inflation.
It is expected that inflation will continue to fall over the coming months, particularly as we are now seeing a drop in the cost of wholesale food prices globally which should start to translate into lower food prices domestically.
While the cost-of-living remains high for many, the Department for Work and Pensions has said low-income households will receive the next set of cost-of-living payments between 25 April and 17 May.
The real value of pay continues to fall, where after adjusting for rising prices, real terms pay fell by 3.0% year-on-year for total pay and by 2.3% for regular pay.
Disputes over pay and terms and conditions mean that strikes are set to continue for teachers, junior doctors, nurses, passport workers, airport workers, tube drivers, university staff and civil servants. In February 2023 there were 348,000 working days lost to labour disputes.

Economy

Revised official figures show that the UK economy performed better than previously estimated at the end of last year. It was previously thought the economy had not grown between October and December, but new data shows it grew by 0.1 per cent and avoided falling into recession.
The latest monthly GDP data for February shows that the UK economy saw no growth, where falls in services and production were offset by growth in construction. This follows growth of 0.4% in January, revised up from growth of 0.3%.
Although the UK economy has fared better than previously feared, there are warnings that this year could be particularly challenging, with the International Monetary Fund (IMF) forecasting that the UK is set to be one of the worst performing major economies in the world this year. The IMF predicts that UK economy's performance in 2023 will be the worst among the 20 biggest economies, known as the G20, which includes sanctions-hit Russia.

Business Conditions

Although business conditions clearly remain challenging with high energy costs, increased commodity costs, wage pressures and supply-chain constraints and persistent labour market challenges, we are seeing some signs of emerging “green shoots” of improving business conditions and confidence.
A recent poll from the Confederation of British Industry showed that businesses were expecting a return to growth in the next three months.
Latest results from the ONS Business Insights and Conditions Survey (BICS) suggest business conditions remain challenging, but estimates show small signs of positive improvement for some measures; examples include a smaller proportion of businesses reporting lower turnover, and a smaller proportion of businesses reporting higher prices for goods or services bought, however, it is too early to know if this is the start of a longer-term change in conditions.
Although we are seeing some overall signs of improvement it is clear that some businesses continue to struggle. In March 2023 there were a total of 2,457 company insolvencies in England and Wales, 16% higher than the number registered in the previous year (2,120 in March 2022), and 99% higher than the number registered three years previously (pre-pandemic: 1,233 in March 2020). The main concern around company and individual insolvencies are associated issues such as mental health and homelessness.

Labour Market

Positively, there are more people looking for work with those economic inactive declining, leading to an increase in people in employment and more people that are unemployed and searching for work. Although this comes at a time when job vacancies are falling and so it is likely to be more challenging for those returning to the jobs market.
The UK employment rate was estimated at 75.8% in December 2022 to February 2023, 0.2 percentage points higher than September to November 2022. Employment remains 123,000 below pre-pandemic levels.
Payrolled employees for March 2023 shows another monthly increase, up 31,000 on the revised February 2023 figures, to 30.0 million.
The unemployment rate for December 2022 to February 2023 increased by 0.1 percentage points on the quarter to 3.8%. Unemployment is 71,000 down on pre-pandemic levels.
The economic inactivity rate decreased by 0.4 percentage points on the quarter, to 21.1% in December 2022 to February 2023. Those economically inactive are 422,000 above pre-pandemic levels.
In January to March 2023, the estimated number of vacancies fell by 47,000 on the quarter to 1,105,000. Vacancies fell on the quarter for the ninth consecutive period and reflect uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment.

Conclusion

In conclusion, although we remain in challenging times with the impact of the energy and cost-of-living crisis continuing to be felt by businesses both locally and nationally, we are seeing some signs of improvement with inflation slowly easing and the economy performing better than expected.
Although businesses conditions remain difficult for many which continue to face highercosts including energy and wage bills, business confidence is improving with increasingly more feeling that they will return to growth over the coming months.
While households are still faced with cost pressures particularly from essentials such as food and energy, these are expected to ease throughout 2023.
We are also seeing more people returning to work, with both young people and older workers becoming economically active and helping to ease recruitment difficulties and address labour and skills shortages across the economy.
In Staffordshire we have a confident, diverse and robust economy, demonstrated by the improvement and recovery witnessed since the last lockdown due to Covid.As the ongoing global and national socio-economic challenges persist it remains vital that local partners work together to support local businesses and residents. We continue to deliver the Staffordshire Means Back to Business Programme which has helped hundreds of Staffordshire businesses transition to new business models including diversification, digitisation and greenification to improve their viability and sustainability.
We continue to support residents into work and help businesses address ongoing labour shortages and skills gaps to aid survival and growth. A key part of this being the recently established Staffordshire County Council Job Brokerage Service which is designed to match local people, employers and training providers to fill jobs and provide people with the jobs and careers they need.
Alongside this the Government’s ‘Plan for Jobs’ schemes such as Restart, and Skills Bootcamps 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 where they can access better paid jobs will be key.