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12th September 2023

Chambers react to labour market figures

Paul Butterworth, CEO at Chambers Wales South East, South West and Mid, said:

“Employers and employees have all had to deal with the increased cost-of-living and high inflation for a period now, particularly the price increases in goods such as food and fuel. The latest labour market figures are welcome news for employees that wage growth has improved and caught up with rising prices, easing the burden of the home cost-of-living.

“Our Quarterly Economic Surveys consistently detail the hiring difficulties experienced by businesses in Wales, with 71% struggling to find suitable staff in Q2 of 2023. Making it difficult for candidates attempting to find or return to work, the fall in vacancies and increase in the UK unemployment rate will be concerning.

“SMEs face even higher cost pressures due to wage inflation. With businesses still struggling in this area, it is imperative for policymakers to understand the pressures businesses are facing in Wales. One in six high street shops are shut in Wales; inflation is still affecting consumer confidence.

“Reinforcing these issues is the ongoing skills shortage which requires a more joined up approach between the education sector and business. Employers continue to seek investment in programmes to assist with upskilling existing staff and job retention. Chambers Wales South East, South West and Mid supports action on skills development through FE, HE and skills providers to provide the skills that support businesses and economic growth in Wales.”

Reacting to the latest ONS labour market figures, Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said:

“Today’s figures show pay for individuals may be improving, but the current situation offers little comfort to businesses up and down the country. Firms are still struggling to contain wage inflation arising from candidate’s expectations and workforce pay settlements.

“At the same time, recruitment issues remain a top concern for business. The latest research by the BCC shows record numbers of organisations reporting hiring difficulties – particularly in the hospitality, retail and manufacturing sectors.

The fall in the overall number of job vacancies reflects a weakening economic outlook and BCC’s Quarterly Economic Forecast published last week predicts further growth in unemployment during the next three years.

Underneath these headline figures the skills crisis continues and the labour market picture will remain challenging. Our message to policymakers is clear, invest in skills now for a more prosperous economy.

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