Job losses continuing across region, despite the easing of lockdown

INCREASE IN CONFIDENCE, BUT LACK OF ORDERS IS BITING HARD

REDUNDANCIES are coming thick and fast as output remains sluggish and new orders stay slow, despite the lockdown easing, according to new industry figures.

The latest NatWest East Midlands Business Activity Index suggests things did pick up in May, compared with April’s historic low, but nonetheless signalled a substantial drop in activity across the East Midlands private sector.

The seasonally adjusted index measuring the month-on-month change in the combined output of the region’s manufacturing reflected the ongoing impact of the Covid-19 outbreak and the unprecedented emergency public health measures that had been put in place.

The rate of contraction was marked overall, but was the slowest of the 12 monitored UK regions.

John Maude, of NatWest Midlands and East Regional Board, said: “The East Midlands private sector began to return to work in May, with the rates of contraction in activity and new business easing from April’s recent lows.

“That said, the pandemic-related downturn continued as firms struggled to bolster sales.

“The substantial drop in new orders drove firms to reduce selling prices further amid hopes of attracting new clients.

“Despite a greater degree of confidence across the private sector amid hopes of an end to the lockdown, firms continued to shed workers, and at a marked pace.

“The decrease in employment came despite efforts to utilise furlough schemes to retain workers, as a slump in client demand drained revenues.”

Service providers in particular registered a significant decrease in new business amid ongoing social distancing measures.

The contraction in the region’s economy has already led to redundancy announcements for big-name respond – rightly so. We know we won’t get everything right. But we will always be bold. We’ll always put the health of our people and clients centre stage.”

April Bembridge, the firm’s chief people officer, said productivity had businesses such as Triumph, RollsRoyce, Leicester Tigers and Gardner Aerospace.

NatWest said the degree of sentiment across the East Midlands private sector remained relatively subdued in May, albeit rising to a three-month high.

Confidence was broadly in line with the UK average, as firms across the region linked optimism to hopes that activity will return to pre-pandemic levels and demand will bounce back.

However, businesses continued to register a considerable drop in employment in May, despite the ongoing use of furlough schemes.

The decrease was commonly linked to hiring freezes due to the pandemic, and lower new orders.

The rate of job shedding was slightly softer than the UK average, despite being marked overall.

Service providers continued to record a sharper fall in staffing levels than their manufacturing counterparts.

The May data also indicated a marked, albeit slower, reduction in outstanding business across the East Midlands private sector.

With the exception of April’s recent low, the drop in work-in-hand was the sharpest since the height of the global financial crisis in December 2008.

The fall in backlogs of work was widely linked to lower new orders, social distancing measures and travel restrictions.

The rate of depletion was broadly in line with that seen across the UK as a whole. However, costs have come down for the second month in a row, partly due to lower oil prices and raw material costs.

Selling prices across the East Midlands’ private sector declined further in May, albeit at a softer pace.

The rate of reduction was solid overall and the second-steepest since July 2009, while another monthly decrease in cost burdens helped firms lower their output charges in an effort to bolster client demand and boost sales.