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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

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.

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 28

Local Picture

  • In Staffordshire we have seen long-term improvement in the local economy and labour market since the last national lockdown due to the COVID pandemic.
  • Unemployment, youth unemployment and dependency on work-related benefits have reduced considerably and we have significant job vacancies available for those unfortunate enough to be still out of work.
  • Local partners also continue to deliver a wide range of programmes to support businesses, residents and economic growth helping to create better jobs and opportunities in Staffordshire and Stoke-on-Trent.
  • However, following long-term declines in the claimant count approaching pre-pandemic levels, the number of work-related benefit claimants in Staffordshire has started to rise again with a further small increase of 40 claimants between September and October 2022 to a total of 14,365 claimants. The claimant rate has remained unchanged at 2.7% of the working age population in October.
  • The reasons for such increases are complex and will be individual in nature with only DWP confidential case files identifying the precise reasons why residents have required the support of work-related benefits.
  • However, it is clear that global events continue to impact the economy, primarily the war in Ukraine and the related increases in fuel and energy prices which are impacting local businesses. This further pressure on our businesses alongside higher supply and staff costs and reduced consumer confidence is a particular concern in Staffordshire given that we have a larger proportion of businesses operating in high energy-intensive sectors (manufacturing; construction; logistics; wholesale and retail; and agriculture, food and farming) with high exposure to energy costs compared to the national average.
  • Unfortunately, we are starting to see increases in unemployment and therefore it is more important than ever that the right business support is in place to help viable businesses survive during these challenging times, help people to start their own business and ensure that benefit claimants have the right support to access the high number of jobs available in the economy.
  • It is important to recognise that although claimant numbers remain higher than pre-pandemic given our strong position going into the pandemic we still perform comparatively well for our claimant rate which stood at 2.7% of the working age population in October compared to 4.8% regionally and 3.7% nationally.
  • This month the youth claimant count in Staffordshire saw an increase of 80 to a total of 2,635 young people.  The number of claimants aged 18-24 has therefore increased but been partly offset by a fall in the number of claimants from other age groups.  This is the same as what has happened in the last month across England as a whole.  At the moment it is not entirely clear as to why this is the case, and we will be closely monitoring the situation, but it may be due to young people leaving formal education and having no place of work to move into.  The proportion of young people in Staffordshire aged 18-24 that are claiming work-related Universal Credit has increased this month from 3.9% to 4.1% compared to 2.7% for the working age population and 4.7% nationally.
  • Staffordshire saw  no change in the number of available job vacancies between September and October, with a total of 17,000 which is more than work related benefit claimants. Stoke-on-Trent saw a 7% rise in vacancies to a total of nearly 5,700 which is lower than the number of claimants. Clearly, there continues to be high demand for labour and skills across most parts of the economy to aid the recovery from the pandemic but the business impact of rising inflation, energy prices and wage levels are likely starting to weigh on recruitment levels.
  • The occupations to see the most significant increases during October include roles in sectors experiencing ongoing recruitment difficulties such as health (nurses), hospitality (kitchen and catering assistants), education (teaching assistants and secondary education teaching professionals), logistics (elementary storage occupations), and digital (IT business analysts, architects and systems designers).
  • However, even with these changes in recruitment during the last month, demand for roles in social care including ‘care workers and home carers’ remain by far the strongest of all occupations.
  • the increase in job vacancies to record levels is resulting in further 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 the recovery or limit business survival unless the skills gap is quickly and effectively addressed, clearly 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.
  • 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 the labour and skills gap.
  • 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.
  • In conclusion, overall the labour market remains very tight with low levels of unemployment, a reduced labour pool due to increased economic inactivity for various reasons i.e. early retirement, health issues such as long-COVID and mental health issues, young people remaining in further or higher education, and high numbers of job vacancies in key growth sectors. This is leading to clear skills gaps and labour shortages due to difficulties around attracting people to the jobs that are in demand.
  • Unfortunately, we are also starting to see the early impact of recent global events which are being felt on the local and national economy, with the war in Ukraine and the related increases in fuel and energy prices impacting local businesses. This further pressure on our businesses alongside higher supply and staff costs and reduced consumer confidence is a particular concern in Staffordshire given that we have a larger proportion of businesses operating in high energy-intensive sectors (manufacturing; construction; logistics; wholesale and retail; and agriculture, food and farming) with high exposure to energy costs compared to the national average.
  • Therefore, the current economic climate presents a number of challenges to the local, regional and national economies in the short-term, with the Bank of England now predicting that the UK is expected to fall into its longest recession on record, with interest rates raised by the most in 33 years. The Bank has warned the UK would face a “very challenging” two-year recession, with unemployment potentially almost doubling by 2025.
  • Clearly the full impacts of these issues within Staffordshire are impossible to predict and will depend on many factors including any local and national support measures that are put in place. 
  • It is more important than ever that the right business support is in place to help viable local businesses survive during these challenging times and support for local people to upskill and start their own business.
  • Efforts need to continue on ensuring that the jobs in demand from businesses are attractive with decent terms and conditions particularly during a cost-of-living crisis and that local residents have the skills required by local businesses to fill in demand roles and where possible 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 Government’s ‘Plan for Jobs’ 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.

Local Initiatives

  • National and global events continue to impact the local and UK-wide economy, primarily the war in Ukraine and the related increases in fuel and energy prices which are impacting local businesses.
  • Therefore, the biggest issues facing business currently are for national government to address as only they have the powers and financial capacity to do so, but it is also clear that the local partnership work to champion and support the local economy has never been more vital and is clearly having a significant positive impact across Staffordshire.
  • 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.
  • Staffordshire County Council has made a commitment to invest a minimum of £100,000 per year in Start-up and Step-up business support programmes.
  • 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.
  • 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 the UK had its 3 Government within a year, following the resignation of Liz Truss and Rishi Sunak appointed as the new Prime Minister and he has appointed his new cabinet.
  • Chancellor Jeremy Hunt has unveiled the contents of his Autumn Statement in the House of Commons, including tax rises and spending cuts worth billions of pounds aimed at mending the nation's finances and help address the cost of living and debt and growth crisis.
  • This further political change comes at a time when Covid-19 infections, hospitalisations and deaths have all started to fall.

Cost of Living Crisis, Inflation and the War in Ukraine

  • Over the last month eight million people on low incomes who receive certain benefits including Universal Credit and pension credit have been getting the second instalment of a targeted cost of living payment. The Department for Work and Pensions will make the £324 payment directly into bank accounts by the 23rd November.
  • This further Government and local support is clearly needed with new figures from the Office for National Statistics showing that almost half of UK adults are finding it difficult to afford their energy bills, rent or mortgage payments.
  • This rising concern comes at a time when around half of people eligible for vouchers to help with energy bills have not yet redeemed them, according to the Post Office and payment company PayPoint.
  • As well as households feeling cost pressures the Government is also seeing its borrowing rise due to inflation with total public sector net borrowing at £20bn in September - £3bn more than economists had expected.
  • New analysis from the County Councils’ Network reveals that county authorities in England face a £3.5 billion increase in inflationary and demand costs this year and next.
  • Overall inflation rose from 10.1% in September to 11.1% in October, its highest level since 1981.
  • To try to control inflation the Bank of England raised interest rates from 2.25% to 3%.
  • While wages are rising at their fastest rate in more than 20 years, they are not keeping pace with rising inflation.
  • Growth in average total pay (including bonuses) was 6.0% and growth in regular pay (excluding bonuses) was 5.7% among employees in July to September 2022.
  • In real terms (adjusted for inflation) over the year, total pay fell by 2.6% and regular pay fell by 2.7%.
  • This below inflation growth in wages is seeing a number of business-critical strikes taking place, planned or being proposed for the coming months including rail strikes, nurses, universities and the civil service.

Economy

  • Monthly gross domestic product (GDP) is estimated to have fallen by 0.6% in September 2022, after a fall of 0.1% in August 2022 driven by a fall in the services sector.
  • Estimates for September 2022 are affected by the bank holiday for the State Funeral of Her Majesty Queen Elizabeth II, where some businesses may have closed or operated differently on this day.
  • Looking at the quarterly picture, GDP fell by 0.2% in the three months to September 2022 compared with the three months to June 2022.
  • The Bank of England expects UK to fall into the longest recession on record, with the bank warning that the UK would face a “very challenging” two-year recession, with unemployment potentially almost doubling by 2025.

Business Challenges

  • Lingering business issues including energy costs, commodity costs, wage pressures and supply-chain constraints and persistent labour market challenges are leading to weakening structural business conditions and confidence.
  • In October 2022 there were a total of 1,948 company insolvencies in England and Wales up 38% compared to the same month last year (1,410 in October 2021) and 32% higher than three years previously (pre-pandemic – 1,477 in October 2019).The main concern with company and individual insolvencies are associated issues such as mental health and homelessness.

Labour Market

  • Economic inactivity continues to increase due to long-term health issues such as long-Covid, mental health problems and health problems worsening due to long NHS waiting lists, alongside older workers taking early retirement and young people staying in education and overall is significantly above pre-pandemic levels.
  • This has seen overall employment decline and remains well below pre-pandemic levels and at the same time has contributed to record low unemployment with many no longer looking for work or claiming out of work benefits.
  • This reduced overall workforce and smaller pool of labour and skills for businesses to draw on led to record high job vacancies which remain very high and the labour market remains tight with employers’ findings it difficult to recruit the talent that they need to aid economic recovery and support growth.
  • The UK employment rate for July to September 2022 was 75.5%, largely unchanged on the previous quarter and 1.1 percentage points lower than before the pandemic (December 2019 to February 2020). Employment remains 334,000 below pre-pandemic levels.
  • Payrolled employees for October 2022 shows another monthly increase, up 74,000 on the revised September 2022 figures, to a record 29.8 million.
  • The unemployment rate for July to September 2022 decreased by 0.2 percentage points on the quarter to 3.6%. Unemployment is 140,000 below pre-pandemic levels.
  • The economic inactivity rate increased by 0.2 percentage points on the quarter to 21.6% in July to September 2022. During the latest three-month period, the increase in economic inactivity was largely driven by those aged 16 to 24 and 35 to 49 years and those who are long-term sick, who increased to a record high of 2.5 million. Importantly, over two-thirds of those becoming long-term sick in 2021 and 2022 were already economically inactive for another reason. Those economically inactive are 629,000 above pre-pandemic levels.
  • In August to October 2022, the estimated number of vacancies fell by 46,000 on the quarter to 1,225,000. Despite four consecutive quarterly falls, the number of vacancies remain at historically high levels with one person unemployed for every one vacancy. An increasing number of businesses are now reporting holding back recruitment because of economic pressures.

Conclusion

  • In Staffordshire we have a confident, diverse and robust economy, which has seen long-term improvement in the labour market since lockdown. However, national and global events continue to impact the local and UK-wide economy, primarily the war in Ukraine and the related increases in fuel and energy prices which are impacting local businesses.
  • We welcome many of the Government measures announced through the Autumn Statement which will support local businesses and residents during these challenging times. We will also continue to provide local support through the wide range of economic programmes delivered in Staffordshire.
  • Overall, the labour market in Staffordshire remains positive with long-term improvement in out of work benefit claimant numbers and we are starting to see signs of reduced job vacancies with local partnership work increasingly successful in matching those looking for work with the roles that are in demand to support business recovery and growth.
  • There also continue to be reports of significant inward investment and business growth successes, with the work of local partners key to a number of those success stories.
  • The cost-of-living crisis and rising inflation continues to be the most pressing matter for many and the Government’s policy and support introduced through the Autumn Statement will be fundamentally important in helping to ease living costs, reduce further inflation rises and boost economic growth.
  • Globally the economy is continuing to weaken, driven by historically high inflation levels. The UK economy is now believed to be at the start of the what is expected to be the longest recession on record with GDP falling again in September driven by a fall in the services sector, with hospitality and retail being hit by reduced consumer spending amidst the cost-of-living crisis.
  • There are lingering business issues including inflated commodity costs, energy prices, wage pressures, supply-chain constraints and workforce shortages remain the biggest business concerns, leading to weakening structural business conditions and confidence.
  • Economic inactivity continues to increase and is significantly above pre-pandemic levels,this has seen overall employment decline and remains well below pre-pandemic levels and at the same time has contributed to record low unemployment. This reduced overall workforce and smaller pool of labour and skills for businesses to draw on led to record high job vacancies which remain very high and the labour market remains tight. Given the recession unemployment is forecast to potentially almost doubling by 2025, prior to that we are likely to see recruitment decline with fewer job vacancies available to those looking for work.
  • Given the ongoing global and national socio-economic challenges which 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. And supported the creation of over 400 new Apprenticeships.
  • We have also established the new 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 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)

Edition 18 (2.33 MB)

Edition 19 (3.43 MB)

Edition 20 (3.3 MB)

Edition 21 (2.1 MB)

Edition 22 (2.3 MB)

Edition 23 (2.76 MB)

Edition 24 (2.65 MB)

Edition 25 (4.36 MB)

Edition 26 (3.11 MB)

Edition 27 (2.85 MB)

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