BRADFORD’S economy is performing well but is facing significant “headwinds”, a local organisation has said.

Labour shortages, supply chain difficulties and the Ukraine conflict are all affecting the way businesses in the district operate, while on the other hand, the fact that many local companies are expanding internationally is seen as a sign that things are still positive.

Victoria Wainwright, President of Bradford Chamber of Commerce, said that cost pressures remain a concern and that many businesses may see lower profit margins this year.

She was speaking in response to the NatWest Yorkshire & Humber PMI Business Activity Index – which measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – slipping to a three-month low last month.

The index was down to 58.2 in April, down from 64.3 in March, but still pointed to a sharp expansion in business activity across Yorkshire and the Humber at the start of the second quarter, with growth matching that seen for the UK as a whole.  

Latest survey data also suggested a strong level of business confidence in the region during April, although output expectations slid to their weakest since December 2020, as some respondents were concerned about the economic outlook.

The level of employment across the private sector in Yorkshire and the Humber continued to increase, with only London having a faster upturn out of the 12 monitored UK regions.

Ms Wainwright said: “The Bradford economy is still performing well, but we are facing significant headwinds. 

“Confidence remains reasonably good, although many firms are expecting profit margins to take a hit throughout this year, for all the publicised reasons. 

“The increasing uncertainty relating to labour shortages, global supply chain difficulties, and the war in Ukraine are not helping businesses to plan, prepare and invest for the future, but domestic demand is holding up and many local exporters are also making more enquiries about new international opportunities, so that is a positive sign too. 

“Cost pressures, for example for raw materials and energy, are understandably a concern – some businesses will try to absorb some costs but it’s inevitable that some of it will be passed on. 

“Manufacturers are obviously being hit more than the service sector in areas like raw material costs and energy prices.  So, orders are still coming in, but profits will be squeezed.”