Business News Round Up (13/10/2023)
Recruitment activity across Scotland sees downturn in September amid economic concerns
Both permanent staff appointments and temp billings contracted sharply in September in Scotland, according to the latest Report on Jobs by the Royal Bank of Scotland and S&P Global. Scottish recruiters recorded a second successive monthly fall in permanent placements during September. The rate of contraction quickened from August and was sharp overall. According to panellists, the downturn was linked to fewer vacancies as well as some reports of difficulties in sourcing and securing candidates. Permanent staff appointments across Scotland fell at a slightly quicker rate than that seen on average across the UK. At the same time, September data signalled a sharp drop in temp billings across Scotland, thereby extending the current run of decrease to a year. While the pace of reduction eased from August, it contrasted with a fresh expansion at the UK level. Recruiters attributed the drop to weaker demand conditions and candidate shortages in certain sectors. Sebastian Burnside, chief economist at Royal Bank of Scotland, said, “Recruitment activity across the Scottish labour market deteriorated as the third quarter drew to a close. Both permanent staff appointments and temp billings fell at sharp rates, with panellists linking the reductions to candidate shortages and falling demand for labour amid concerns over the wider economic climate.”
38% of business report labour shortages holding back growth – CBI/Pertemps Employment Trends Survey
More than two-thirds (71%) of respondent businesses have been impacted by labour shortages over the last year and nearly 8 in 10 believe (77%) that access to skills is a threat to labour market competitiveness, in a new survey out today (Thursday). In its annual Employment Trends Survey with Pertemps Network Group, the CBI reports that labour shortages are having a material impact on firms’ ability to invest, respond to demand and grow. Nearly 7 in 10 businesses (69%) are trying to narrow the gap by investing in training to upskill current workers while 3 in 5 (60%) are investing in technology and automation to improve productivity and reduce reliance on labour. The survey found that: More than a third (38%) of businesses have been unable to grow and respond to new business opportunities despite demand due to labour shortages in the last 12 months, while more than 1 in 5 (22%) have had to hold back investment in other parts of the business and 1 in 10 (12%) have shrunk due to shortages; More than three quarters of respondents (76%) said the UK has become a less attractive place to invest/do business in the last five years – the most negative result since the survey began; Respondents saw access to skills (77%) and access to labour (66%) as key threats to the UK’s labour market competitiveness. Concern about the cost of living (61%) continues to be a threat; In 5 years’ time, more than 8 in 10 (82%) respondents believe that access to skills would still be a threat to labour market competitiveness, demonstrating the long-term nature of the issue.
Interest rates expected to be held after small economic growth
The UK economy returning to growth in August has fuelled expectations that interest rates will be left unchanged again next month. The economy grew marginally by 0.2% in August following a sharp fall in July. Analysts described the figures as “lacklustre” and said higher borrowing costs and the higher cost of living was weighing on consumers and businesses. Rates were held at 5.25% in September, ending a run of 14 consecutive rises after inflation started to slow. Economists said the figures painted a picture of the economy “only just grinding forward”. “We still haven’t felt the full effect of previous rate hikes, and so the prospects of recession are still looming on the horizon with so little respite expected on sideswiped budgets,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown, adding that the Bank of England looked “set to keep the pause button held on interest rate hikes”. The UK is not currently in recession but there have been concerns over weak growth, with the economy set to be a key area in the election which is widely expected next year. In September, Bank of England governor Andrew Bailey said there were “increasing signs” that higher rates were starting to hurt the economy.
https://www.bbc.co.uk/news/business-67084533
Durham University unveils £5m Growth, Sustainability Research Hub
A new joint research initiative focusing on energy systems integration has been awarded £5m by the Engineering and Physical Sciences Research Council (EPSRC) to help boost UK economic growth and address regional needs. The Northern Net Zero Accelerator – Energy Systems Integration for a Decarbonised Economy will make, collate, and translate knowledge from research on net zero technologies, policy, energy, and industrial systems. Led by Newcastle University in partnership with Durham, Hull, Northumbria, Sunderland and Teesside Universities, the Accelerator has received £5m through a new scheme called Place Based Impact Acceleration Account (PBIAA). Northern Net Zero Accelerator – Energy Systems Integration for a Decarbonised Economy is part of several new projects that have received £41 million funding to enhance UK research and innovation clusters. These clusters will combine some of the country’s leading engineering and physical sciences research with the ambitions of civic bodies and local business to enhance different regions’ economic capability. The theme of the Northern Net Zero Accelerator is on Energy Systems Integration for a Decarbonised Economy.
https://www.miragenews.com/durham-university-unveils-5m-growth-1102574/