Hucknall and Bulwell businesses should be 'cautiously optimistic' about future after economy bounces back
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But it warns that rising costs means stormy waters are ahead for some time yet.
The UK’s gross domestic product (GDP) increased by 7.5 per cent in 2021 – the fastest pace of growth since 1941 – having fallen by 9.4 per cent in the previous year when the harshest lockdown restrictions forced numerous industries to shut down temporarily.
But with the economy shrinking by 0.2 per cent in December as a result of ‘plan B’ measures to combat the Omicron variant, and costs for staffing, energy and raw materials rising significantly through the early part of 2022, the prospects for the continued rate of growth remain in the balance.
Chris Hobson, director of policy and external affairs at East Midlands Chamber, said: “The headline figure clearly illustrates both the resilience and potential of the UK economy, having come through some extraordinary challenges over the past two years to record a strong recovery.
“Throughout the bleakest moments of the pandemic, we continued to state that the businesses directly impacted by lockdown restrictions remained viable in the long term once they were able to operate as normal.
“Ultimately, what businesses really want is an economy that’s fully open and functioning, and we’ve been encouraged by the strong demand that met the lifting of restrictions.
“In conversations with firms across the East Midlands in numerous sectors, we know they are excited to now move on to the next chapter and have a successful 2022.
"However, they recognise there are some significant immediate-term challenges ahead related to the spiralling cost of doing business, which must not go unaddressed.”
In the Chamber’s Quarterly Economic Survey, the proportion of East Midlands businesses concerned about future price rises grew from 46 per cent in quarter three in 2021 to 62 per cent in quarter four.
This rose to more than 90 per cent when looking solely at manufacturers.
The British Chambers of Commerce (BCC), of which East Midlands Chamber is one of the largest members, published research illustrating further the various price pressures facing businesses in the Midlands – with 62 per cent citing rising costs from utilities such as gas and electricity, 60 per cent from raw materials, 59 per cent from staffing, 51 per cent from fuel, 35 per cent from import or export tariffs, 30 per cent from shipping containers and 27 per cent from UK taxes.
Mr Hobson added: “These challenges are from a combination of factors – some are global pressures and others more pertinent to the UK economy – and while we’re confident they will even themselves out in time, it creates a tricky path for businesses to navigate and manage costs in the immediate future.
“So while the economic bounceback is reassuring, there is perhaps only cautious optimism right now as we grapple spiralling inflation and price rises – issues that
ultimately hit consumers in the pocket and affect the private sector’s ability to grow and create jobs.
“It’s therefore crucial the Government does all it can to tackle these medium-term issues and, in the longer term, ensures it doesn’t place any additional costs on businesses and individuals for the remainder of this Parliament.”