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16th January 2024

Labour market cools

The ONS has released the latest labour market figures, including the employment and unemployment rates, number of vacancies, wage growth and economic inactivity.

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

“With the number of vacancies falling for the 18th time in a row and minimal changes in the employment and unemployment rates, it is clear that the labour market is beginning to stall.

“Our Chamber’s Quarterly Economic Survey for Q4 of 2023 found that almost two thirds of businesses in Wales experienced difficulties finding suitable staff, especially for skilled manual and technical, professional and managerial roles. This, combined with the latest Quarterly Recruitment Outlook research by the British Chambers of Commerce, shows that the recruitment landscape is an ongoing challenge for businesses. Until there is wider economic certainty, employers and potential candidates are acting very cautiously.

“The skills shortage in particular is a source of huge frustration to businesses who have ambitions to grow as they struggle to recruit suitable staff and are hesitant to invest further in training amid tough economic conditions. In Q4 of 2023, only 16% of businesses in Wales increased their investment in training. Business in Wales would welcome a long-term strategy on skills, training and development to help resolve their hiring difficulties.”

Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce said: 

“Today’s data confirms labour market conditions are continuing to cool, with wage growth and the number of vacancies falling once again. However, labour costs remain a huge pressure on businesses dealing with a challenging economic environment.

“Too many firms are still struggling to hire and retain staff. Our latest Quarterly Recruitment Outlook, showed over three quarters of firms attempting to recruit faced difficulties.

“The skills crisis continues to cast a shadow over the labour market. To help tackle the problem, we need a more flexible apprenticeship levy, access to rapid upskilling and reskilling opportunities, and a long-term commitment to Local Skills Improvement Plans across England.

“Businesses will be looking closely at the upcoming Budget for help to plug skills gaps and get more people into work.”

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