December's Economic Bulletin

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 we also put the spotlight on hope the structure of the local economy has changed during the pandemic to date including changes in businesses and jobs.

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

Read December's Economic Bulletin in Full 

Read past editions

Key messages from this edition

Key messages from edition 17

• Over the last month we have seen spikes in COVID-19 infections across Europe and the emergence of a new ‘variant of concern’ in South Africa named Omicron. Although the new variant is believed to be highly transmissible it is still too early to understand the effectiveness of current vaccines or its impact on hospitalisations and deaths.
• In light of these concerning developments the Government has reintroduced a number of restrictions including the mandatory wearing of face masks in shops and on public transport.
• To help control the spread of Omicron the Government is also accelerating the booster programme, with the gap between the second vaccine dose and booster reduced from six to three months and all eligible adults to be offered a booster Jab by the end of January.
• The emergence of the Omicron variant comes at a time when England was seeing a dip in infections, but there are early signs of a new serge cases and levels remain high with Omicron likely to further increase cases putting the health service under “significant strain” over winter.
• The latest R value for England now stands at 1.0 to 1.1 which is a decrease from last month and means that, on average, every 10 people infected will infect between 10 and 11 other people. While the latest growth rate for England is -1% to +2% per day which means that the number of new infections could be broadly flat, growing by up to 2% or shrinking by up to 1% every day.
• We also saw weekly COVID-19 deaths reach highest level since March, although prior to the emergence of Omicron Sage predicted a fall in hospitalisations and deaths heading into December. Latest data shows that we are seeing a decline in hospitalisations with a rate of 6.49 per 100,000 people in the week ending 21 November far lower than the peak of 36 per 100,000 in January. While deaths also decreased over the latest week ending 19^th November and thankfully remain far lower than in late January.
• Positively a recent study by the London School of Hygiene and Tropical Medicine showed that due to a combination of infection and vaccinations, England’s high level of immunity means it has the least potential for a large-scale wave of the virus than any other country in Europe.
• This is in part due to some 19.8 million people or nearly a third (34.4%) of population aged 12 and over having now had a third jab, with studies suggesting it gives a big jump in protection back to over 90 per cent.
• It is clearly vital that those eligible for the booster jab receive it in order to reduce the spread of the virus, limiting pressure on the NHS through hospitalisations and avoiding unnecessary deaths this winter.
• As well as health concerns, the emergence of the new variant, Omicron raises concerns regarding the economic recovery with the FTSE and new investment impacted, hospitality receiving Christmas cancellations and tightening of self-isolation rules disrupting schools and businesses.
• Inflation remains a concern with price rises at highest in a decade at 4.2% in October driven by rising fuel and energy prices across Europe with pressure on the Bank of England to raise interest rates and further squeezes on cost-of-living.
• Firms also continue to struggle with high vacancy rates amid worker shortages both due to a shortage of skills and a willingness of those out of work to fill vacancies in sectors with difficulties around current Ts&Cs.
• While public sector borrowing also remains high with figures for October 2021 showing the UK public sector borrowed £18.8 billion, the second highest October borrowing on record.
• More positively Gross domestic product (GDP) is estimated to have grown by 0.6% in September 2021 but remains 0.6% below its pre-pandemic level (February 2020).
• The number of payroll employees showed another monthly increase, up 160,000 to a record 29.3 million in September 2021 – partly reflecting the increase in people working multiple jobs since the crisis struck.
• In the latest period (July to September 2021), there was a quarterly increase in the employment rate of 0.4 percentage points to 75.4%, and a decrease in the unemployment rate of 0.5 percentage points to 4.3%. However, long-term unemployment continues to increase.
• The UK economic inactivity rate was estimated at 21.1%, 0.9 percentage points higher than before the pandemic.
• The number of job vacancies in August to October 2021 continued to rise to a new record of 1,172,000, an increase of 388,000 from the pre-pandemic January to March 2020 level.
• The Glasgow Climate Pact has been agreed following the COP26 summit. It is the first ever climate deal to explicitly plan to reduce coal, the worst fossil fuel for greenhouse gases, but critics say it falls short of what is needed to avert a climate catastrophe.
• The Prime Minister has announce that new homes and buildings in England will be required by law to install electric vehicle charging points from next year. The Government says the move will see up to 145,000 charging points installed across the country every year.
• Looking locally, the claimant count in Staffordshire saw a further decrease of 440 claimants between September and October 2021 to a total of 18,560 claimants, which is a higher proportional decline than seen regionally and nationally. The claimant rate has remained at 3.5% of the working age population in October, well below the national rate of 4.9%. This reflects the continued recovery in the labour market following lockdown 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.
• The proportion of young people in Staffordshire aged 18-24 that are claiming Universal Credit currently stands at 5.2% compared to 3.7% in March 2020 and still well above the rate for the working age population. Encouragingly for the seventh month in a row Staffordshire has seen a decrease in the youth claimant count with a decline of 85 over the last month to a total of 3,375, 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 63% in October 2021 when compared to the same month last year and is now only 5% lower than two years previously. We have seen an increase over recent months but levels still remain comparatively low compared to pre-COVID due at least in part to government measures which were put in place to reduce insolvencies in response to the pandemic. Concern regarding how many are viable now that Government support is at least partly being withdrawn.
• As seen nationally, this month we continue to see a rapid increase in job vacancies in Stoke-on-Trent and Staffordshire, reflective of the increasing demand we are seeing for workers across most parts of the economy to aid the recovery from the pandemic. Staffordshire saw vacancies increase by 12% between October and November equivalent to over 4,700 more job vacancies, this was just below the increase of 13% seen nationally. Stoke-on-Trent also saw a rise of 12% with just over 1,600 more vacancies in November compared to October.
• The occupations to see the most significant increases during November 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 logistics, health and social care, hospitality, education and retail.
• 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.
• 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, there are clear concerns regarding the emergence of Omicron and the potential impact on both the effectiveness of vaccines in preventing severe illness and the economic recovery. There is also the ongoing concern regarding inflation and potential interest rate rises alongside cost-of-living fears for many with energy and fuel prices seeing significant increases. 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.