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.

To find out more about your sector representative, or to get in touch to ensure your views are heard, click here.

Below is a summary of key sector updates from the latest Worcestershire Area Council meeting.

Banking

The Recovery Loan Scheme opened on 6 April, where up to £10 million can be borrowed on 1 to 6-year terms. Surprised to have received only 1 enquiry for that scheme so far. Generally, businesses all reporting a big uptake in their services. Construction and manufacturing are doing well. Hospitality not doing as well yet but did well last summer when they could trade. Some clients are saying they’re extremely busy. Delivery times on materials is a problem. This is causing project delays, but businesses are managing client expectations. No signs of repayment issues concerning Bounce Back Loans or Coronavirus Business Interruption Loan Scheme.

Engineering

Manufacturing sector is a mixed bag, some performing well, some not so well. Aerospace market still down and automotive is down because of electrification. Inflation and supply chains are causing problems. Inflation being caused by cost of freight and raw materials.

Horticulture/Food and Drink

Experiencing some issues with EU Exit. Looking for an office in Europe to allow them to ship products from Europe, New Zealand, and the USA straight to European customers. Developed breeding programme for new varieties of hops. With pubs closed over Covid, sales have gone down. People have generally been drinking less during lockdown and more sales from supermarkets hasn’t made up the gap. Beer gardens are doing well, and pubs will after 17 May as indoor hospitality opens. Work closely with hop growers in the two counties. Big trend for brewing with US and New Zealand hops. Export worldwide and are having some success. British brewers since Brexit have become more interested in local brewing.  Carbon footprint and local supply is also important. Tried to slow the hop growing down through Covid but hops are perennial plants. Issues with lack of labour from Eastern Europe – both Covid restrictions and paperwork after Brexit are an issue. Generally, food production market is doing well but drinks market not as good.

Insurance

Insurance businesses have been doing well and are inundated with new enquiries. Issues with cybercrime which now occur more than all traditional crimes put together. Ransomware and invoice fraud are big problems. Some insurers have stopped covering these because of ethics and size of problem. Internet of Things, criminals now accessing internet enabled items and hacking into systems like heating controls. Insurance premiums high and the industry is reluctant to ensure certain sectors. Specific sectors are looking for government to underwrite in areas. For example, trade credit insurance is being underwritten by government. Construction (especially high rise) and surveying are also asking for the same. Events sector can’t get cancellation insurance. Travel and tour operators can’t get bonds or professional indemnity insurance in certain areas, which is difficult because it’s legally required. Government are speaking to insurance providers to try and encourage them to cover high-risk sport and leisure. Some care companies are turning down residents because they can’t afford or get insurance. Insurers are telling clients ‘take it or leave it’ or not insuring at all. Some insurers are pulling out of the care market altogether.

IT

It feels like we are entering a period of review and consolidation.  It appears that more people are starting to strategize about future IT requirements, reviewing systems and policies.  Contracts are starting to be awarded and this may be a catalyst for assessing IT requirements, with many of these demanding a level of cyber awareness and security measures to be in place.

After spending 14 months in unfamiliar environments the emphasis on the cloud, Zoom and Teams to do business doesn’t seem to be going away, although some shifts back to the workplace are likely with the upcoming relaxation of critical distancing measures. Zoom now host 3.3 trillion meeting minutes annually.  Turnover is up 400%.

Businesses aren’t rushing to be back in the office, however, and client visits destined to be returning even further into the future.  Some businesses are reporting returns to work on a gradual/tiered basis with dates ranging from mid-summer right up to the end of 2021.  Tech to support remote and flexible working is definitely here to stay.

It is also worth mentioning that data protection should be at the forefront of the strategy too.  Recently the ICO have contacted organisations to question why they are not on the ICO register.  Its nearly the 3-year anniversary of the enforcement of the GDPR so it may be a threshold point in time where they are no longer accepting non-conformance – this is purely speculation, but organisations should be aware, and familiarise themselves with the legislation.  First and foremost, and critically, that it is indeed legislation and not guidance.

Legal

Just finished financial year and budget ended up on target. Some sectors are above budget, e.g. commercial property and litigation which have both been busy. House moves have been high due to the stamp duty holiday. All very positive and clients have a real sense of optimism. There are still EU Exit challenges with shipping delays etc. But there has been a big upturn for businesses. Corporate sector are seeing lots of positive signs, lots of new start-ups, investments and management buyouts looking to the future. Looking forward to face to face networking.

Manufacturing

Demand is strong but experiencing some problems with people availability. Inflation seen in raw materials, sometimes 500% increase over the last 6 months, which makes it difficult to set prices. Shortage of materials in some cases because some businesses have changed during the pandemic, and global demand has changed in the China and USA. Sector has been hit by shortage in chips, which a lot of components rely on, because of reduced production last year and more demand on the home entertainment side. Two major manufacturing facilities for automotive in the UK have stopped their production line – Mini and JLR – even amongst high demand because of supply chain problems including chips. 2mm and 3mm steel sheet shortages in Germany as well. Positive but a bit cautious. How will it be sustained after the initial backlog is cleared? Must be wary of move towards home office because it could lead to two tier society. It could be difficult for manufacturers if home working is seen as the new norm.

Property

Not been a huge change since the last Area Council. The market has been surging along. The residential market has been busy with sales, especially with a lot of out-of-region demand. Serious issues with managing viewings because not very many new properties are coming to market. In the commercial market, industrial warehousing is buoyant and there is a major supply issue particularly in Worcester. Some sites barely come to market before being let. Most business sectors are looking to grow instead of consolidating or downsizing which is encouraging. The development pipeline is a struggle because planning is slow and land availability limited. There isn’t space for businesses to grow. Starter units near Junction 6, M5 are filling up with smaller businesses and will be full soon. Office sector started to pick up as returning to office work picks up. Nationwide there is an ongoing debate about the future of office space and needs are being reassessed. At a local level, office stock is relatively limited. Retail has been the quietest of the commercial sectors. Worcester as a city has fared quite well and received good enquiries from small, independent retailers. Lot more interest in repurposing bigger sites in Worcester City. Improving dynamics of city centres is important and that won’t all be reliant on retail.

Recruitment

Temporary and permanent recruitment markets are both busy. Blue collar worker demand is high. Big challenge is that the candidate market is lagging behind demand. Confidence in individuals is still a bit low, with some concerned about future lockdowns, but business confidence is high. In the last week or two they have seen a few more applications coming through so early signs are of some loosening.

Retail

Whilst high street footfall saw a big increase after the first restrictions of lockdown were eased those numbers have now dropped and we’re now seeing less people shopping on the high street than back in 2019.  Numbers aren’t recovering.  This has serious implications on the future of our high streets that lots of sectors have to realise.

Our biggest issues are around supply which has been a problem since the start of the year.  The UK government are doing nothing – or don’t even seem aware of the prices importers are now paying for containers and availability problems.  It definitely feels like a problem that’s being ignored.

Voluntary

Some offices being closed in the sector to move to agile working. Beginning to return to the office but will be flexible working with hot desking system. Blended approach with virtual and face to face meetings. Government beginning to release trials for post EU-Exit funding. Trying to put bids in currently. Their aim is to bring people who are further away from the jobs market closer to it by building skills.

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