Joint Area Council March 2022 Update

The Chamber works closely with businesses across all sizes and sectors to ensure that business views are represented to key local and national decision makers. To ensure every sector is represented the Chamber hosts two Area Councils, one in Worcestershire and one in Herefordshire. Each Area Council consists of 15 specialists, from different sectors, who meet six times a year to provide feedback from their respective professions. The feedback is then used to inform our economic reports and shape the policy activity we deliver to Member businesses.

Every other month both Area Councils meet in a Joint Area Council. If you want to find out more about your sector representative or get in touch to ensure your views are shared at the next meeting, click here.

Below is a summary of key sector updates from the latest Joint Area Council meeting:

Engineering – inflation in wages, 5% pay increase this week as an example. Raw material prices doubled, some costs can be passed on, some not. Energy costs, new quote is double price. No issue with recruitment but other Manufacturers have. Turnover excellent.

Main cost pressure is raw materials. Starting to see 4x increase in stainless steel prices, challenge is this means always talking to clients about price increases. Energy and transport costs high, those investing in renewables are slightly insulated from this. Tax increases, labour cost increases likely to be 5-15% in sector. Looking at semi automation as a solution for people shortages.

Manufacturing – very busy, high turnover. Steel price quotes lasting 1 day, very difficult for quotes to customers. Recruitment challenging – some staying a short time and then leaving. Salaries increasing, possibly twice this year. Aligned to construction industry who are feeling the pressure of raw materials and supply delay too, making production planning difficult. Looking at machines for automation.

Business conditions are very tough. Material shortages (semiconductors, cables etc). Usually very reliable suppliers are unable to confirm delivery dates. Material cost increases and Energy costs a challenge. Prolonging conflict in Ukraine/Russia will put more pressure on some raw materials.

Banking – liquidity ok with most clients, but very wary about future due to increased costs and inflation. Staffing and skills challenges for most clients. If dealing with Eastern Block countries, bank will need information. Some clients revaluing commercial freeholds. People expecting to see improvements in commercial banking technology.

Logistics – normally the sector sees downturns quickly, but nothing yet, still really buoyant, but watching the situation carefully. Has vacancies and a real churn of staff. Getting vehicles is a challenge with the second hand market booming. Fuel a real challenge, the sector will have to pass these costs on – reviewed weekly. Busy, full order book. Pay increase in July, again will have to be passed on, increasing prices to clients.

Retail – business is good, start of spring season. Opened second site and new offices. Stock is key retail challenge, currently has 6x usual stock due to issues in supply and issues in freight charges. Raw material and other costs risen by c.20%. Staff shortages – tend to get 3-4 applicants now as opposed to previous 30 per role. Starting to do some manufacturing on site – more control and opportunity. Main retail – footfall figures good although a lot of change on the high street. Online sales still high, new customers shopping online, people still spending money, but concerns over how long this will continue.


Agriculture, Food and Drink – news today milk prices to increase. Costs of fuel, labour, hops all increasing. Prices of food will rise. Challenges with wheat prices. Some hop growers looking to come out of the market due to past challenges. Main challenges for growers – labour for picking.

Tough time in hospitality, uncertain about this years trade as financial pressures on individuals will affect their spend. Some activity of larger businesses buying smaller one. Agriculture challenges: fertiliser, fuel, finding people, or farmers are just not planting due to costs. Will impact on food prices. Working from home still not replacing what used to be purchased in sector.

Food manufacturing – supply of packaging (glass jars as an example), 5 months delay and extra costs on chilled transport. Examples of businesses ceasing as can’t make this profitable for their customers. Consumer food prices rocketing, and not finished yet. New sector consideration – food waste. More food waste than food poverty in UK, huge moral issue. Waste is also an environmental issue.

Professional Services – biggest issue in sector is recruitment. Sector very busy, usually professional services are the last to see the implications from other sector challenges. New ways of working and salary pressures making it harder to recruit and retain. Property sector has been busy, some signs of this slowing.


Education – investment in new medical school and teaching facility and new inclusive cricket centre in partnership with England and Wales cricket board. Supporting Ukraine in accommodation. Students finishing thinking about options post study. Difficult recruiting for undergraduate numbers, but investing, innovating and refining post graduate offer – eg. supply chain (will be looking for internships, help for businesses). Research projects available for businesses to use, almost fully funded.

IT/Cyber – high number of cyber attacks at Ukraine companies. Next wave of scams likely to be linked to energy increases.

Insurance – With continued increase in material and labour costs and delays in the supply chain insurance companies are urging policyholders to check that they are not underinsured. For example timber, steel and concrete are in short supply and have increased in cost by 30%, 100% and 25% respectively and construction labour costs have increased by 10%, therefore is your building adequately insured and how long will it take to rebuild & return to current productivity levels following a major claim? Would a steel and concrete industrial unit that cost £1m to build 2 years ago cost £1m to rebuild today and how long would the rebuild process take?