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Business news updates

Business news

This month (February 2024) we have updates on the following topics:

  • General economic outlook
  • The East Midlands economy
  • Challenges faced by businesses
  • Skills in demand in our region
  • Labour markets

General economic outlook:

  • Despite the slight shrinkage in the economy in October, the economy grew by 0.3% in November defying expectations. The ONS said that this growth was led by the services sector, with Black Friday sales boosting retailers. Speaking to the BBC, Grant Fritzner, from the ONS, said November figures were driven by "strong retail sales but also car leasing, computer games and fewer strikes than recent months". Economists remain unsure if the UK can avoid recession, defined as two quarters of negative economic growth. 

  • Surprisingly, in December, the rate of inflation in the UK rose slightly from 3.9% to 4%. From August, the Bank of England has kept the interest rate in the UK static at 5.25% with experts thinking it will likely stay at this level until the rate of inflation reaches the 2% target. According to the BBC, Ruth Gregory, deputy chief UK economist at Capital Economics, said she expected inflation to fall below the Bank's 2% target in April, which would leave policymakers "in a position to cut interest rates by June".

  • There were 2002 corporate insolvencies in December 2023 – a 5% increase on the same month last year and also higher than pre-pandemic figures; Price Waterhouse Coopers says this is mostly felt in the retail and hospitality/leisure sectors, with an 18% and 27.5% increase in insolvencies respectively. While it is likely that these sectors, as well as the construction and business sectors, will continue to be affected - the tech sector is also coming under increased pressure.

The East Midlands economy:

  • According to the NatWest Regional PMI survey, the East Midlands business activity index increased to 50.7 in December 2023, marking the fastest rise in business activity since May 2023. In the business activity index, a figure above 50 indicates growth in business activity.

  • Speaking to Insider Media, Rashel Chowdhury, from the NatWest Midlands and East Regional Board, said: "East Midlands Firms ended 2023 on a slightly better note, as output returned to expansion and the decline in new orders softened for a second successive month to only a marginal pace". 

Main challenges faced by businesses:

  1. Falling demand for goods and services
  2. Inflation of goods and services prices
  3. Energy prices
  4. Interest rates
  5. Competition with other UK businesses
  6. Taxation
  7. Business rates
  8. Exchange rates
  9. Property rental costs
  10. Supply chain disruption

Skills most in demand in our region in December 2023 were:

  1. Auditing
  2. Warehousing
  3. Nursing
  4. Learning strategies
  5. Machinery

Labour markets:

Ashfield's December 2023 figures show that we have 3.8% or 2965 people of working age seeking work, this is slightly higher than in November 2023, which had 2915 people searching for work, but remains in line with other neighbouring local authorities.