Encouraging signs for Lancashire businesses but inflation and recruitment are cause for concern

Lancashire businesses reported growth in UK sales during the third quarter of 2021. However, there are concerns about risks to future growth.

The results of the latest Quarterly Economic Survey conducted by the Chambers of Commerce in Lancashire, indicate that companies are showing strong signs of recovery following the easing of Covid restrictions.

The manufacturing sector has shown a significant increase in companies reporting both increased domestic sales over the last three months and for orders over the next three months. In the service sector the number reporting increased sales has slowed a little but is still growing.

Manufacturers who export have also reported improved sales following a period of stagnation and contraction. The service sector, however, continues to report a worsening situation for exports which has been the case since the end of 2019.

Employment remains on the up with firms reporting large increases in workforce in the last quarter and expected increases in over the next three months. However, recruitment is proving increasingly difficult for most firms with record numbers of those who tried to recruit reporting they experienced problems.

Geoff Mason, Policy Manager at the North & Western Chamber of Commerce said: “It is encouraging that businesses are seeing continued growth as the economy recovers from Covid restrictions. It is especially promising that we are seeing reports of increased export activity amongst manufacturers.

“Export issues for firms in the service sector have been the case since the UK’s exit from the EU. Hopefully the news that 60 WTO members are to liberalise regulations on services that should cut costs for service exporters will have a positive impact on the sector.

“Continued problems with recruitment into all sectors needs to be resolved. The end of furlough may release more people into the job market that could help with shortages. Much of the problem is around people not having suitable skills and it is interesting to see that companies are planning to increase investment in training as a response to the situation.”

The survey also found that confidence is improving with regard to turnover and profitability improving over the coming year. There are still concerns about inflationary pressures coming from raw materials and overhead costs.

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