Economic growth slows as firms face labour and supply shortages - Chamber

A sharp slowdown in economic growth illustrates the problems firms are still facing with labour and supply shortages, business leaders said today.

New figures released by the Office for National Statistics revealed the UK economy grew by just 0.1 per cent in July as the last Covid-19 restrictions were lifted in England.

Although it was the sixth consecutive month of growth, the increase was much lower than in the previous month when it grew by 1 per cent.

The growth was aided by arts, entertainment and recreation activities as more people resumed going out.

A boost also came from outdoor events such as festivals and amusement parks which were back in full swing following the end of social distancing.

The fastest growing service industry was air transport, which increased by 118.4 per cent.

But, according to the new figures, the economy is still 2.1 per cent below its pre-pandemic peak in February 2020.

Raj Kandola (pictured), head of policy at Greater Birmingham Chambers of Commerce, said: “There 's no denying the pace of economic growth slowed considerably in July as the expected bounce from the lifting of national restrictions on Freedom Day failed to materialise.

“There are a number of factors to take into account for these results - notably the fallout from the so called 'pingdemic ' and the knock-on impact it had on labour and supply shortages.

“It also correlates with the early feedback we are picking up from our latest Quarterly Business Report survey - a number of local firms are still facing difficulties in attempting to hire staff for example.

“Nevertheless, there are grounds for optimism as we enter the Autumn, particularly as the vaccine roll out continues at pace and hopefully this will translate to greater levels of consumer spending and a sustained period of economic growth.

“However, it 's vital the Government uses this time to set out a clear strategy on how they intend to minimise the prospect of future lockdowns and give businesses the confidence they need to effectively plan and rebuild over the next few months. ”

There 's still time to complete Greater Birmingham Chambers of Commerce 's latest Quarterly Business Report Survey.

The Chamber wants to hear from businesses of all sizes to understand the challenges that firms in the region are facing right now.

The information will be shared with contacts in local and national government.

Click here to complete the survey.

The Q3 Quarterly Business Report launch event focuses on bridging the post pandemic skills gap in Greater Birmingham.

Speakers include representatives from HS2, the West Midlands Combined Authority and Birmingham City Council.

Click here to book on to the event.