Workers in demand as East's economic recovery gathers pace

Sous chef Damien Cabanagh serving up some food at The Commodore in Oulton Broad

Demand for workers in the services sector in the East of England has risen sharply - with chefs in high demand - Credit: Danielle Booden

The East of England economy has expanded for the third successive month, new figures suggest.

The NatWest East of England PMI Business Activity Index for May shows the quickest-paced monthly rise from April (61.0) to May (64.0) since the measure was launched nearly 25 years ago – amid a continuing recruitment drive. The average figure for May across the UK’s 12 regions was 62.9.

The bank’s seasonally-adjusted Purchasing Managers’ Index (PMI) monthly surveys look at the percentage volume of business activity among manufacturers and service providers with 50.0 representing no change, figures above that a rise and those below a fall.

It shows new order growth at a seven-and-a-half year high among the region’s private firms. The rate of growth was the sharpest since November 2013 –  but it was still lower than the UK average.

Many respondents linked the rise in demand to the latest easing in government pandemic restrictions and the reopening of some businesses.


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However, the survey did indicate slight jitters about the future, with East of England private companies less confident of higher activity levels in 12 months’ time when they took part in the May poll.

Positive sentiment was at its lowest since last December with companies less upbeat than in other parts of the UK –  but figures remained above the long-term average.

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Also on the plus side, the region recorded a rise in staffing levels for the fourth month in a row as firms recruited at the fastest pace seen since September 2016.

Planned business reopenings and greater demand were cited as factors, with manufacturers showing a steeper increase than service providers.

The level of outstanding business in the East of England rose fasters than in other parts of the UK with anecdotal evidence suggesting firms beset by workforce and material shortages and delivery delays. Costs also rose for the 12th consecutive month – and selling prices in response.

John Maude – who sits on the NatWest Midlands and East regional board – said the latest PMI data revealed another record improvement in business activity across the East of England in May as further easing of virus-related restrictions led to a marked upturn in sales. 

“The sustained surge in demand made it difficult for some firms to meet their commitments, with capacity pressures continuing to emerge. However, a further acceleration in the rate of job creation suggests companies remain committed to clearing their backlogs,” he said.

“The recent supply pressures made matters difficult, with material shortages helping to push up input costs at an even faster rate in May. In fact, output price inflation reached a series high, signalling the sharpest increase in average charges for goods and services in over two decades of data collection. Until restrictions and bottlenecks ease across the globe, we can expect supply and inflationary issues to persist.”

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