Chamber News

The Chambers Quarterly Economic Survey (QES), is the UK’s largest independent business survey and is currently open for responses from local Norfolk businesses. The previous quarter’s QES showed that whilst businesses continued to recover from the deepest recession on record, concerns were raised over the strength of that recovery. Q3 Indicators, such as domestic sales and orders improved in the last quarter.  However, it also revealed stagnation in the proportion of firms reporting improved cashflow and increased investment. Worryingly, firms’ expectations of price increases and fears about inflation are hitting record levels. 45% of the Q3 respondents reported increased domestic sales, with 63% of the hospitality sector benefitting from domestic sales as a result of restrictions being lifted. However, 51% of companies reported that they expected prices to increase over the next 3 months and 60% cited concerns over inflation. Three months on, it is now time to ask again what Norfolk businesses think.  We need to her from a wide range of Norfolk businesses – large and small to understand the true picture of the local economy. The QES only take a couple of minutes to complete – it is anonymous and your support would be greatly appreciated. The QES Q4 is open for responses until midnight on Monday 22 November.  Take part in the QES now. Photo credit: Getty Images/Chamber Canva Pro

Norwich City Council have released their latest economic barometer. The report highlighted: Locally

• Hotels across Norfolk saw a boom in bookings, as more people swapped winter sun for breaks closer to home.
• Birketts recently recruited 19 trainee solicitors in Norwich, Ipswich, Cambridge and London.  Whilst Howes Percival is launching a recruitment drive to create over 30 new jobs.
• More than one third of East Anglia businesses will have to temporarily reduce products or services to manage staff shortages as stock and supply chain problems put pressure on firms.
• The ‘worlds oldest toy store’ Hamley’s have opened a store on the ground floor of Chantry Place.
• Amazon has invested more the £5.2 billion in the East of England since 2010 according to data.  They have created more than 9,000 full and part time jobs

Nationally

• September data indicted another strong month for the UK service sector but severe supply constraints contributed to escalating inflationary pressures
• Supply chain delays resulted in slower new order growth and rising material and labour shortages all constrained UK manufacturing
• Average house price grew by 7% across England (6.8% in East of England)

For full details of the latest economic barometer click here.

The Broadland and South Norfolk Business Awards are back and we’re celebrating achievement, innovation and diversity shown by businesses in these regions.

Despite the challenges of the past 18 months, businesses have survived and even thrived, not just financially, but by being adaptable, innovative and excelling at supporting the very communities that have supported them. To be recognised for this, we want you to nominate your business for one or more of the 10 awards and join us in celebrating all of the hard work that has taken place over the last 18 months. There is even five new categories that have been added, including Outstanding Employer, Business in the Community, Working Together, Business Resilience and Business Innovation .

There is also the Retailer of the Year Award open for public nomination. If you have a favourite independent retailer that goes the extra mile then please nominate them today and you could win £100 of shopping vouchers.

If you’re a retailer, make sure you request a marketing pack to advertise to your customers.

With the support of headline sponsor Fosters Solicitors, we will showcase the best of Broadland and South Norfolk’s talent at an awards ceremony on 23 March 2022 at Norwich City Football Club.

Nominate your business or favourite retailer today.

The Chancellor has listened to Chambers’ long-standing calls for changes to the business rates system and this will be good news for many firms. This will provide much needed relief for businesses across the country, giving many firms renewed confidence to invest and grow. However, these changes must be the start, rather than the end point of the reforms to this broken system. Additional investment in skills, infrastructure and better access to finance will be key drivers for our economic recovery and will provide longer-term benefits and opportunities for businesses across the country, however it is disappointing that very little of these benefits are specifically aimed at our region. However, businesses have been battered by 18 months of the pandemic and problems around supply chain costs and disruption, labour shortages, price rises, soaring energy bills and taxes and there will be difficult months ahead. While investments announced today will take time to bed in, Government should consider other action that will relieve immediate pressures, particularly on smaller businesses, such as urgent review of the shortage occupation list to allow for short-term visas in key sectors, and an SME energy price cap. If firms face unexpected bumps in the road, the Chancellor must be prepared to take further action to get the economy firing on all cylinders again. The British Chambers of Commerce provides its full response to the Budget 2021 Commenting on the latest forecasts by the Office for Budget Responsibility, Suren Thiru, Head of Economics at the BCC, said: “As expected, the OBR’s latest forecasts provide a significantly more positive assessment of the UK’s near-term growth prospects, compared to the March Budget. However, with acute staff and supply shortages and surging price pressures increasingly weighing on economic activity, the recovery may be slower than the OBR predicts. “The downgrade to the OBR’s near-term forecast for business investment is a key concern, as weak investment levels would limit the government’s ambition for a sustainably high wage/high skill economy by stifling productivity. “The stronger than anticipated growth over recent quarters and lower long-term economic scarring from Covid has delivered a marked improvement to the UK’s expected fiscal position. As such there is scope for the future path of fiscal consolidation to be eased to avoid suffocating the recovery.” Commenting on the reforms announced to the Business Rates system, Suren Thiru, Head of Economics at the BCC, said: “We are pleased that the chancellor has listened to our call to deliver more frequent revaluations. Moving to a three-year-cycle will help to reduce the huge changes in rates bills that clobber firms and enable them to plan their growth strategies with greater confidence. “However, a system that responds more frequently to changing economic conditions must be made easier for firms to navigate. The current system already generates a significant number of appeals, and if it is not made simpler, more frequent valuations would exacerbate this problem. “The new business rates relief to support investment in property improvements is a longstanding BCC call and will help provide ratepayers with much needed time to recoup any capital investments they have made before their higher rates bill applies. This will give firms more confidence to push ahead with investments in key priorities, including the transition to net zero.” Commenting on freezing the Business Rates multiplier and a new temporary relief for retail, hospitality and leisure properties Suren Thiru, Head of Economics at the BCC, said: “We are pleased that the Chancellor listened to BCC’s call to blunt firms’ business rates bills amid soaring inflation. The freeze in the business rates multiplier and support for retail, hospitality and leisure will provide businesses with more financial headroom to repair business cashflow, diminished by the pandemic and rising cost pressures and invest more in growth plans to power the recovery.” Commenting on the extension to the £1 million Annual Investment Allowance Suren Thiru, Head of Economics at the BCC, said: “We are pleased that the Chancellor listened to our call to extend the £1 million annual investment allowance. This should provide a major incentive for firms to crowd in investment, with firms continuing to report that this is a crucial tool which gives them the confidence to push ahead with their plans.” Commenting on funding for childcare, Jane Gratton, Head of People Policy at the BCC, said: “When parents struggle to find a childcare solution, employers can lose talented people from the workplace, stymieing business growth and prosperity. Additional funding for childcare providers will help parents access high quality affordable childcare and remain in work, ensuring employers retain skills and people progress in their careers.” Commenting on Infrastructure Investment, Jane Gratton, Head of People Policy at the BCC, said: “It’s great to see the Chancellor recognise the importance of local infrastructure in driving our economy forward and levelling up communities across the country. “This investment will be a welcome boost toward that goal and will also be vital in achieving our net zero targets by funding more efficient, reliable and greener public transport. “To truly upgrade our connectivity to ensure it meets business needs, investment in a modern rail system is required. The Government must publish its Integrated Rail Plan and deliver on its commitments to critical schemes including the full HS2 network and Northern Powerhouse Rail.” Commenting on Research and Development funding, Hannah Essex, Co-executive director at the British Chambers of Commerce, said: “Measures announced by the Chancellor that both fund and encourage investment by firms in Research and Development are to be welcomed. “Greater funding will encourage investment in research & development which should boost the UK economy at a time when productivity growth remains weak. “However, to ensure that UK firms remain competitive on the global stage it is vital that greater investment in R&D is supported by retention of our intellectual property.” Commenting on the Shared Prosperity Fund, Hannah Essex, Co-executive director at the British Chambers of Commerce, said: “The Shared Prosperity Fund is crucial to ensuring local areas receive the investment they need. The fund must be designed to maximise local autonomy, respond to the voice of business and power economic growth. Chambers of Commerce across the UK stand ready to support the pilot schemes and help develop proposals further once published.” Photo credit: Getty Images/Chamber Canva Pro

A survey of 2,600 UK exporters has revealed that the recovery in export sales has largely stalled in Q3. The proportion of firms reporting increased sales rose only three points (to 30%) from Q2 (27%), whilst the proportion reporting decreased sales fell by just two points (Q3:26%/ Q2: 28%).

• Proportion of UK exporters reporting increased export sales (30%) rose slightly from Q2 (27%)
• However, proportion reporting decreased sales remained stubbornly and historically high at 26%, while 45% report no change
• Recovery in manufacturing exports began to fall back slightly from previous quarter

The balance of manufacturers reporting increased export sales was +7%, down from +8% in Q2. The balance of service sector firms reporting increased export sales was +6%, up from –7% in Q2. Respondents cited issues arising from the supply chain crisis, as well as Brexit related problems, as the main causes of difficulties with export sales. Some said that they had ceased exporting to the EU altogether due to issues such as red tape and delays at borders. Respondents also pointed to the surging cost of shipping as a serious issue, with one firm noting a single container from China rose in cost from £2100 in the previous year to £15000, as well as the shortage of lorry drivers as impacting export sales. Elsewhere, UK exporters were slightly more likely to report increased investment plans (30%) than non-exporters (25%), although both groups remain at historically low levels. However, on other key indicators such as cash flow, both groups were broadly aligned – 34% of exporters reported increased cash, compared to 33% of non-exporters, while 23% of exporters reported a decrease, compared to 22% of non-exporters. Responding to the findings, Head of Trade Policy at the British Chambers of Commerce, William Bain said: “A whole range of factors is currently providing sustained headwinds for our exporting firms to operate in. This data must act as a warning to take export-boosting measures now. “Exports of goods are key to our economic recovery from the pandemic, but trading conditions remain fragile, and businesses need further supportive measures. Everything from the new UK-EU trading conditions to raw material costs to the costs of container hire in overseas markets is constraining export growth and supply. “More focus needs to be given to lowering business costs with trade partners and addressing non-tariff barriers, which present roadblocks to exports. The government must also acknowledge the scale of the problem in shipping markets. “The UK government should act now to reintroduce SME Brexit Support Grants and use its export strategy, and the Spending Review, to provide stronger export finance. It should also work with the accredited chamber network to kickstart overseas exports from SMEs across the UK.” Photo credit: Getty Images/Chamber Canva Pro

William Bain, Head of Trade Policy at the British Chambers of Commerce, said: “Business will welcome an Agreement in Principle between the UK and New Zealand covering trade in goods and services. “We particularly welcome the intention to agree comprehensive chapters on market access, labour mobility and professional qualifications, digital trade, and green goods and services. In the year prior to start of the pandemic, the UK had a £366m surplus in services trade with New Zealand, with particular strengths in insurance, pensions, travel, communications, other financial services and intellectual property. “New Zealand-UK trade is currently between £2-3bn per annum. When this agreement is translated into a final free trade agreement it should provide new opportunities for UK exporters as well as resulting in some small falls in the price of New Zealand wine and other goods imports. “UK road vehicles, pharmaceutical and other manufacturing exporters will welcome these improved trading terms, with cars accounting for a fifth of all UK goods exports to New Zealand. The agreement on green trade also has the potential to set a new benchmark on a commitment to sustainability within free trade agreements globally. “We look forward to engaging with the UK Government and the New Zealand Ambassador in the final stages of these negotiations and to giving our views on the draft text at the earliest opportunity.” Photo credit: Getty Images/Chamber Canva Pro

Intensive discussions between the UK government and the European Commission will begin over the Protocol on Ireland/Northern Ireland. The Cabinet Office Minister, Lord Frost CMG gave a speech in Lisbon on Tuesday seeking the replacement of the Protocol. On Wednesday, the Commission published four papers on customs, agri-food, medicines and governance on the arrangements between GB and NI, seeking to reduce checks on customs and goods movements. We will be seeking engagement with both the UK government and the Commission given the importance of this issue in NI and also in relation to the entire UK-EU trading relationship and terms. Further briefings are to follow. The latest ONS UK trade data was published yesterday. While there was a modest rise in UK goods exports to the EU in the three months to August compared with the three months to May, exports are around £2 billion less this August, than in August 2018. Read our comments on the data. The ONS has also published the regional trade in goods data for Q2 2021 with a new methodology. Click here to find out more. The Department for International Trade (DIT) has launched a consultation on a prospective trade deal with the Gulf Co-operation Council countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE). Responses are welcome, until Friday 14 January,  here to the following questions. We hope to organise an engagement event on the consultation with DIT officials in due course. The Chamber took part in a discussion with the Cabinet Office last week chaired by Michael Ellis, the new Paymaster General. There was a packed agenda around mutual recognition of professional qualifications, services access, business travel and short term visas in the EU. We discussed legal services, financial services, architecture, auditing & accountancy. Please let us know of those cases where your members are finding services trade with customers in the EU difficult since January As discussions on trade and fossil fuel subsidies in Geneva move quickly towards the WTO 12th Ministerial Council, G20 Trade Ministers reached an accord on WTO reform, health, trade in services and sustainability at the summit in Sorrento this week. The Department for International Trade also announced further details and speakers for its Global Investment Summit on Tuesday 19 October in London and Windsor.

Launched on 22 September 2021, the project supports micro, small and medium-sized businesses to develop digital technology tools through funding and one to one support and continues a successful pilot conducted in early 2021.

Go Digital is delivered by Norfolk County Council, in partnership with local district authorities, to help businesses based in the county identify digital opportunities. It will provide expert one-to-one consultancy and the ability to apply for grants of up to £500. Digital opportunities could include how to sell products and services online, reach new customers using social media, build customer databases, develop new or existing websites and attract new visitors, or how to work out the best homeworking options for teams. Successful Go Digital applicants will be assigned an experienced business advisor who will conduct a ‘digital audit’ and provide a comprehensive report to identify digital opportunities. The advisor will help the business put together an action plan and then businesses will have the opportunity to apply for a grant of up to £500 to help them deliver projects using this plan.

Businesses can find out more and apply on the Norfolk County Council website at www.norfolk.gov.uk/GoDigital.

The funding for 600 additional spaces on Go Digital has been enabled by the Interreg EU funded C-Care Project. C-Care project is a cross border France – England project, aiming to support people and businesses to recover from the impact of the Covid pandemic.

If you have any enquiries about the scheme, please contact the NNDC Economic Growth Team.

A campaign is currently underway to raise awareness of the continued need to fully dual the A47.

It is vital for our county’s economic growth that we clearly demonstrate that Norfolk is ‘open for business’.  From tourism to logistics; energy and manufacturing; to research and agriculture; all sectors across our region rely heavily on the A47, as our main artery East to West and onwards to the Midlands.  Improvements to this route are vital to help us to remain accessible and competitive. 

Commenting on the need to fully dual the A47, Nova Fairbank, Chief Operating Officer for Norfolk Chambers said:

“The full dualling of the A47 is a ‘must have’ for Norfolk Chambers and the wider business community in order to deliver greater economic growth and jobs in this region. 

“The passion and commitment of our business community to achieving a fully dualled A47 is clear and the economic benefits are evident – a fully dualled A47 is a necessity, not a want.”

The ‘Just Dual It’ campaign has been revitalised and Norfolk Chambers is calling on the business community to demonstrate their support and to articulate the benefits that a fully  dualled A47 would have on their businesses. 

At present, further A47 improvement works, including the dualling of the Acle Straight and the Tilney to East Winch stretch, have not been included in the next Road Instructure Strategy (RIS2) funding.  Therefore we need the continued support of the Norfolk business community to help lobby and influence Ministers and the Department of Transport.

Please send your business support quotes, preferably together with a head and shoulders image to be part of the Just Dual It to : nova.fairbank@norfolkchambers.co.uk and A47Alliance@norfolk.gov.uk. 

On Wednesday 13 October the A47 Alliance are doing a digital takeover please add your support quotes to social media, using the hashtags: #JustDualIt and #JustFundIt.

• Business activity improving as more Norfolk firms report increased domestic sales (45%)
• Inflation expectations hit record highs as 59% of Norfolk manufacturers expect their prices to rise in the next three months
• 16% of Norfolk firms reported a decrease in cashflow, with a further 45% seeing no improvement
• Investment lagging the wider recovery as 12% reported a decrease and 56% no change
• Nearly two thirds (60%) of Norfolk respondents cited inflation as an increased cause of concern

The BCC’s Quarterly Economic Survey (QES) – the UK’s largest independent survey of business sentiment and a leading indicator of UK GDP growth – has shown that while businesses continue to recover from the deepest recession on record, persistent weakness in several indicators highlight concerns over the strength of the recovery.

The survey of over 5,700 firms, including those from Norfolk, showed that some indicators, such as domestic sales and orders improved in Q3. However, it also revealed stagnation in the proportion of firms reporting improved cashflow and increased investment. Worryingly, firms’ expectations of price increases and fears about inflation are hitting record levels. 

Business activity:

45% of respondents overall reported increased domestic sales in Q3 (compared to 43% in Q2), while 16% reported a decrease (10% in Q2). 

In the services sector, the balance of firms reporting increased domestic sales dipped slightly to +45% in Q3 from 47% in Q2. The balance of services firms reporting increased domestic orders rose to +48% in Q3,  up from +35% in Q2. 

In the manufacturing sector, the balance of firms reporting increased domestic sales was +45% in Q3, an increase from +33% in Q2. The balance of manufacturers reporting increased domestic orders rose to +24% in Q3, from +13% in Q2      

Firms in the hospitality sector were most likely to have seen increased domestic sales as restrictions eased, with nearly 2 in 3 (63%) reporting as much. This was followed by transport/distribution, and marketing/media, both on 50%.  

Cash Flow:

39% overall reported increased cash flow in Q3 (compared to 27% in Q2), much lower than the percentage of firms who reported a rise in domestic sales (45%).  

16% of firms reported a decrease in their cash flow, while 45% reported no change. Given the dramatic worsening of cash flow at the onset of the pandemic in Q2 2020, the failure to see any significant increases in this metric is a cause for concern. 

Micro (28%) and small (20%) businesses were also more likely than medium (17%) or large (12%) businesses to report a decrease in cash flow in the quarter. 

Investment:

28% of firms overall reported an increase in investment in Q3 (nearly unchanged from Q2 at 29%), far lower than the percentage of firms who reported a rise in domestic sales (45%). The failure to see any positive upward movement in investment is another troubling warning sign for longer term recovery. 

Meanwhile, 14% of firms reported a decrease in investment in Q3, and a further 58% said they had seen no change.  

Inflationary Pressures:

51% reported overall expect their prices to increase over the next three months (46% in Q2) with just 1% expecting prices to decrease (unchanged from Q2). 

In the services sector, the balance of firms reporting expecting to increase their prices rose to +48% in Q3, up from +38% in Q2.

In the manufacturing sector, the balance of firms expecting to increase their prices rose to +59% in Q3, down from +74% in Q2. 

60% of respondents cited inflation as an increased cause of concern (40% in Q2). 64% for manufacturers (46% in Q2) and 57% for service sector firms (44% in Q2). 

95% of manufacturers cite raw materials costs as the driver of price increases.  

In contrast, just 33% of manufacturers cite pay settlements as a driver of price increases, still below its pre-pandemic level. 

Within the survey, firms provided details of the wide range of inflationary pressures on their business, such as 150% increases to some steel products, and 600% increases in shipping containers 

Comment:

Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:

“”Our latest data indicates a disappointingly modest uptick in economic activity in the third quarter as the boost from the end of restrictions was increasingly stymied by supply and staff shortages and rising cost pressures. 

“The key services sector recorded the strongest improvements as consumer-focused firms, including hotels and hospitality, received the biggest boost from the easing of social distancing restrictions. Manufacturers saw more limited gains as increasingly severe supply chain disruption stifled their ability to fulfil orders and meet customer demand.   

“The results point to an underwhelming three months for business investment as the damage done to firms’ cash flow by the pandemic and growing concerns over a more burdensome tax regime squeezed investment intentions. 

“Acute supply shortages and rising raw material costs drove an historic surge in inflationary pressures in the third quarter. However, with little evidence in our figures that higher inflation is stoking a broad-based escalation in pay settlements, the MPC should have enough leeway to keep interest rates steady over the medium term.  

“Though the UK economy remains on track for moderate growth in the third quarter, with staff and supply shortages increasingly having a suffocating effect on economic activity and price pressures intensifying, a spell of stagflation maybe inevitable.”  

Commenting on the finding, Nova Fairbank, Chief Operating Officer for Norfolk Chambers said:

“The supply chain crisis, alongside wider labour shortages and spiralling price rises, is clearly starting to drag on Norfolk’s economic recovery from Covid-19. 

“Our businesses are being battered by a deluge of up-front cost pressures, including huge increases in the prices of key raw materials and shipping, as well as now facing a rise in National Insurance Contributions. At the same time, they are losing out on opportunities for growth due to the labour shortages, despite many already raising wages and offering training. “

Responding to the findings, Director General of the British Chambers of Commerce Shevaun Haviland, said:      

“The focus must now be on creating the best possible environment for businesses to grow and thrive. By supporting firms through the difficult months ahead they can begin to generate wealth, create jobs and support communities. That is by far the best way to sustainably deliver the tax revenue the government needs to support public services and the wider economy. 

“That’s why I am calling on the government to place a moratorium on all policy measures that increase business costs for the remainder of this parliament and to finally deliver fundamental reform of our broken business rates system. 

The Prime Minister must take action now, with plans not plaudits, or businesses across the country, and our wider economic recovery could falter under the weight of these pressures.”  

Further to Norfolk Chambers recent announcement that we were unfortunately closing to new Kickstart applications at the end of September 2021, we are delighted that, as a result of the Chancellor’s surprise announcement yesterday (04 October), we are now able to remain open to new Kickstart applications. 

The Chancellor, Rishi Sunak announced at the Conservative Party Conference, that the DWP Kickstart Scheme would be extended by a further 3 months to March 2022.  The Kickstart Scheme delivers funding for employers offering new job roles for 16-24 years old who are currently in receipt of Universal Credit.

This announcement means that the DWP and Gateways like ourselves, can continue to support young people into jobs and can continue to support and build the skills, knowledge and experience of young people at risk of long-term unemployment well into 2022.  We can also continue to support employers to access the young people to fill their Kickstart placements.

The Chancellor announced that with the support of employers across the UK, including those in Norfolk, over 76,900 young people have now started in their Kickstart job with 3,600 continuing to start in roles each week.  Employers across Great Britain have created over 295,000 Kickstart jobs so that young people can find a job that is right for them.

In Norfolk alone, the scheme has been extremely well supported by the Norfolk business community with nearly 1,400 placements being created by local employers across the county, which is fantastic news.  However, it does take time to recruit young people into these roles, and as a result, the extended deadline gives employers more time to find the most suitable candidates for their current live Kickstart vacancies.  In addition, the revised deadline allows for new applications to the Kickstart Scheme from employers and variations from Gateway organisations until Friday 17 December 2021.

Also announced yesterday, Mr Sunak advised that the £3,000 incentive for employers taking on new apprentices will be extended until the end of January 2022, which is great news for employers wishing to take on their Kickstart placements with an apprenticeship.

For more information, please talk to the Norfolk County Councils Apprenticeship Team apprenticeships@norfolk.gov.uk. Or Apprenticeships Norfolk https://apprenticeshipsnorfolk.org/contact-us.

We look forward to continuing to support you.  If you have any questions, please contact Charlotte Upcraft via charlotte.upcraft@norfolkchambers.co.uk

24 Degrees is a business born out of the pandemic. We collaborated on projects before March 2019, but it was when the country moved into Lockdown that we formalised our partnership. The biggest part of that decision was our desire to help businesses stay visible, keep connected and discover new ways to sell their products and services. That’s where wonderful organisations like the Norfolk Chambers came in.

The Norfolk Chambers encouraged us as a new business and gave us a platform by providing us with a space to deliver a series of Webinars and Masterclasses. We have also been privileged to have our content featured on the Norfolk Knowledge Hub.

The 24 Degrees philosophy is to put the businessperson at the heart of their learning, development and business growth. So, when it came to exhibiting at the B2B Exhibition, there was no question about it. An opportunity to meet loads of people we have only got to know by delivering training and support online – who wouldn’t want that?

Our sponsorship of the Networking opportunities during the Exhibition comes from the same place. Businesspeople meeting other businesspeople for mutual support; that’s our philosophy in a nutshell.

Oh, and to have fun too – that’s why the networking at this year’s B2B may be a bit different to what people have experienced before!