Rising economic inactivity, a deteriorating economic outlook and the financial squeeze on businesses from soaring energy bills are but a few of the problems for East Midlands businesses. But record vacancies, due to a shrinking workforce, is also crippling many businesses.
As BCC Head of Economics, Suren Thiru, points out:“While payroll employment rose slightly and the unemployment rate continues to fall, the headline figures continued to be flattered by significant underlying factors, including a shrinking workforce.
“Increasing vacancies highlights the historic hiring crunch facing firms. With rising economic inactivity confirming that lots of workers have seemingly quit the jobs market completely, severe staff shortages may remain a persistent drag anchor on economic activity.
“Although there was a rise in earnings growth, with inflation soaring, wages are still comfortably lagging behind price increases. If this continues as expected, real household incomes will be damaged further, stifling consumer spending, a key driver of UK economic output.
“Weakening consumer confidence may limit households’ willingness to support spending by running down savings built-up during Covid to offset declines in real pay.
“The deteriorating economic outlook and the financial squeeze on businesses from soaring energy bills and the national insurance rise risks weakening labour market conditions by dampening recruitment and limiting firms’ ability to increase wages and invest in their staff.
“More must be done to help people access rapid retraining opportunities for in-demand jobs, including assisting older workers to turn to more sustainable jobs. Introducing a new skills tax credit to incentivise employers to invest in training for workers would help to revitalise employer-led training.”
