UK Business Outlook Report December 2021
CIPS UK Services PMI and IHS Markit have released their UK Business Outlook Report for December 2021. This report reveals how confident UK businesses in the service sector feel about their prospects for the next 12 months.
Please find below some of the key highlights from the report:
- New business growth hits five-month high despite surging price inflation
- We’ve seen the strongest increase in new work since June
- Output growth eases slightly from October’s three-month high
- Input costs and prices charged rise at record rates in November
Commenting on the report, Tim Moore, Economics Director at IHS Markit: “Surging price pressures have done little to dent business and consumer spending across the UK economy, according to the latest PMI data. New order growth hit a five-month high in November, job creation remained strong, and backlogs of work built up due to supply issues. The overall speed of recovery looks to have accelerated in comparison to the third quarter of 2021, with output growth mostly driven by services as manufacturers struggle with severe shortages of raw materials and critical components. The vast majority of survey responses in November were received prior to the news of the Omicron variant, however, which has the potential to derail near-term growth prospects and add to international supply chain disruption. Hospitality has been a top-performing area of the UK economy in recent months and looser international travel restrictions delivered a considerable boost to export sales in November. Worryingly, the fastest-growing parts of the service sector are also the most exposed to the return of tighter pandemic restrictions.”
Commenting on the report, Duncan Brock, Group Director at the Chartered Institute of Procurement and Supply: “Services provision in the UK continued to expand in November with only a small fallback in growth from October as domestic pipelines of work perked up and overseas orders piled in at the fastest rate since March 2017. This ongoing demand was fueled by a slight recovery in supply chain performance in some quarters and travel opportunities opened up for more business. Firms were keen to improve on their capacity as hiring levels were maintained even if job seekers kept the upper hand in terms of choice and salary uplifts. Consumers were eager to enjoy the upcoming holidays and spend from their pandemic piggy banks in spite of prices rising at their highest levels since July 1996. With all these reasons to be jolly, firms remained short on festive cheer. Business optimism registered at the lowest level since November 2020 as higher wages, fuel, and material costs were still giving businesses a hangover. Input prices rose to another survey record with 64% of supply chain managers paying more to keep their businesses operating, which begs the question – how long can this continue and can businesses keep up?”
Also commenting on the report, Andrew Brindley, Director at AJ Recruitment said: “Decembers report is another sign on how the service sector is bubbling up and shows the strong demand there is out there. The Omicron variant may prove to soften this upsurge as we head out of December and into the New Year, however here at AJ Recruitment we have seen no evidence of this yet and with the Government stepping up its booster campaign and promising everyone over 18 will get the offer of one early this year we may not see any drop off at all. The other noticeable factor from Decembers report is the increase in prices charged and how in some sectors there have been multiple rates uplifts, this will be putting pressure on wages and it will be interesting to see how this plays out in the coming months.”
This report allows you to benchmark your business against the backdrop of the wider economy. I hope you find it useful to help you measure and understand where Social Care as a sector sits against the wider picture.GB_Services_ENG_2112_PANEL
If you would like to discuss the findings in the above report, or about how we can collaborate, please let us know. To get in touch, email firstname.lastname@example.org or call us on 03305 552233.
As a specialist, family-run recruitment business, we provide a proactive and consultative approach to recruitment within Social Care. We help organisations to target issues such as continuity of staffing, reducing spend where you have a high volume of agency usage and supporting those who have specific talent requirements or are in hard to fill locations. We can help with any immediate staffing requirements or longer-term recruitment projects to ultimately save you time and money on agency spend.
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