Skills shortages risk growth prospects

18 Oct 2017

Business Featured

The findings from the St Helens Quarterly Economic Survey for the third quarter of 2017 were more positive than the previous quarter, with data suggesting that some firms are expecting continued growth in the months ahead.

Both manufacturing and service sector businesses have reported employment growth in the last quarter, however both sectors reported recruitment difficulties, especially with finding skilled technical staff.

Service sector respondents saw improvements in capital investment and cashflow whilst the manufacturing sector have increased their investment in capital investment and staff training.

Local businesses continue to report that the rising costs of raw materials are squeezing margins, forcing many firms to raise their prices.

Tracy Mawson, Deputy Chief Executive at St Helens Chamber, commented: “While some businesses report strong trading conditions, the UK economy as a whole is treading water, and there is no sign on the horizon of a return to healthier levels of growth. However, St Helens businesses are nothing but resilient and there is positive news on job creation and a boost in manufacturing investment; however, skills shortages blight business growth.

“It is concerning that the number of vacancies remains well above the historical average – a further indication of the continued skills shortage faced by business, which is weighing on productivity and growth prospects. The latest research from the British Chamber of Commerce (BCC) found that half of UK firms had faced skills or labour shortages over the past year.

“The BCC’s latest economic forecast suggests that the hoped-for rebalancing of the UK economy towards investment and export is unlikely to materialise in the medium term. The rising upfront cost of doing business in the UK, the uncertainty around Brexit, and the constraints created by skills gaps and shoddy infrastructure collectively outweigh any benefit arising from the recent depreciation of sterling. A cheaper currency does not automatically mean an export boom, no matter how some politicians and commentators will it to happen.

“Business communities across the UK need to see action to boost confidence on two fronts: Brexit and the business environment here at home.  A comprehensive Brexit transition deal, and a swift shift to focus on the future UK-EU trade relationship, is needed this autumn. The UK also needs an Autumn Budget that pulls out the stops to support business growth, at a time of significant uncertainty and change.”

St Helens Chamber Members can be assured that St Helens Chamber will be working very closely with the British Chambers of Commerce to articulate their concerns at the highest level of Government.

To view the full survey results visit www.sthelenschamber.com/about/surveys