East Midlands economic recovery stalled in final quarter of 2020 as businesses left 'treading water'

The East Midlands Chamber’s quarterly economic survey for the final three months of the year shows that cashflow and advanced orders were significantly affected, likely due to the second national lockdown and uncertainty over the end of the Brexit transition period.

Chris Hobson, director of policy and external affairs at the chamber, said: “Future pricing intentions started to creep up as increases in raw material costs – along with access difficulties – began to impact on manufacturers.

“Advanced orders and bookings were down for many as the national lockdown in November caused some to pause their plans and a general sentiment of ‘wait and see’ started to pervade the conversations of some.”

The survey did suggest some light at the end of the tunnel as a net 16 per cent of businesses in Derbyshire, Leicestershire and Nottinghamshire said they expected to create jobs early 2021, although the new national lockdown could have changed that since the study was conducted in November.

At the time, there were also positive indicators for turnover, profitability and investment intentions.

The restrained confidence was reflected in state of the economy index, an overall ‘health score’ based on survey data. It flatlined following the rebound of the third quarter from its lowest level on record.

Chris said: “Many businesses spoke of a ‘weariness’ and ‘fatigue’ at navigating through the difficulties of the past ten months. However, there was still an undercurrent of tentative optimism, perhaps acknowledging that the current predicament can’t last forever.

“The economy, as a whole, hasn’t slipped back to the place it was in during May and June, nor has it continued its rebound. It is treading water.”

He added: “As we move into 2021, policymakers must look at the nation’s capacity for testing, the speed of the vaccine roll-out and the reading of data on how the pandemic is progressing, as well as the level of business support and measures which will allow businesses to reopen.”

To read the full report, go to https://bit.ly/39bKZ7Q.

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