With unemployment in the region among over 16’s having dropped more than any other region in the UK to 3.8%, East Midlands Chamber says the impact of higher staffing costs businesses face from April, following measures announced in the Autumn Budget has yet to be seen.
The latest data from the Office for National Statistics covers September to November 2024 and is now the lowest unemployment rate in England, having fallen 0.8% from the previous quarter. The last time the figure was below this point was April to June 2023.
East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “Falling unemployment is absolutely something we want to see, getting people into jobs and driving the East Midlands economy, but the reality is we’re not at a champagne moment. The swathe of costly measures announced to businesses in the tough Autumn Budget hasn’t hit yet and could well turn this figure upside down.
“Our most recent Quarterly Economic Survey revealed Corporate Taxation at the top of concerns reported by businesses, followed by inflation and business rates. With National Insurance contributions set to rise and a lower rate at which payments are made, added to a higher national living wage on the horizon, businesses have difficult decisions to address.
“We have strong data that shows a doubling of East Midlands businesses planning to cut back on recruitment, up to 22% of firms. To put perspective on that, it was 9% in the survey we carried out before the Autumn Budget was announced. Three out of ten respondents in the survey after the Budget have revised their investment plans downwards for training, while six out of ten plan to up their prices. These are signs that businesses are going ‘should we really be pushing up our costs when we’ve got huge added costs to foot somehow.’
“Our Quarterly Economic Survey is a reliable indicator of business intention in the East Midlands as it’s based on both sentiment and measurable factors. Businesses invest when times are good and the right environment is in place, but when you’ve attributed a certain amount of outgoing cash and then learn your staffing costs will be higher than anticipated you may well rethink.
“Political leaders must not sit back and wait to see how the next few months unfold. We need policies in place that are supportive to businesses in the East Midlands, enable uninhibited growth, so businesses are not having to freeze spending to protect themselves.”
To view East Midlands Chamber’s Quarterly Economic Survey Q4 2024 click here.
